The Most Profitable Locations in Spain for Renting Property Revealed

The Most Profitable Locations in Spain for Renting Property Revealed

According to data from the Idealista portal for the second quarter of 2023, the gross profit from buying a house for rental purposes in Spain averages 7.1%. However, a study conducted by investment company Masteos confirms that in some municipalities, it is possible to earn over 8% annually.

The top 15 locations in Spain based on rental income are:

The most profitable places in Spain to rent out property
MunicipiosProvinceRental Price% AnnualReturn on InvestmentBudget
ParlaMadrid9.4 euros/m25.5%13.96%Between €120,000 and €200,000
EldaAlicante5.2 euros/m28.3%11.14%Less than €80,000
Talavera de la ReinaToledo6.0 euros/m25.2%10.49%Less than €80,000
AlcoyAlicante6.1 euros/m25.2%9.60%Less than €80,000
FerrolA Coruña5.7 euros/m211.9%9.41%Less than €80,000
SaguntoValencia7.7 euros/m214.1%9.34%Less than €80,000
OurenseOurense6.4 euros/m26.8%8.88%Between €80,000 and €120,000
ReusTarragona8.3 euros/m210.9%10.9%8.88% Less than €80,000
Santa Cruz de TenerifeS/C de Tenerife10.2 euros/m28.8%8.86%Less than €80,000
VillarrealCastellón5.7 euros/m25.5%8.86%Less than €80,000
Jerez de la FronteraCádiz8.0 euros/m28.3%8.73%Less than €80,000
LinaresJaén5.1 euros/m25.8%8.73%Less than €80,000
SantanderCantabria9.9 euros/m28.0%8.44%Between €120,000 and €200,000
San Cristóbal de La LagunaS/C de Tenerife8.4 euros/m27.7%8.15%Between €80,000 and €120,000
SalamancaSalamanca8.6 euros/m26.1%6.1%8.12% Between €120,000 and €200,000
Hospitalet de LlobregatBarcelona15.5 euros/m216.2%7.79%Between €120,000 and €200,000
Sanlúcar de BarramedaCádiz7.3 euros/m221.6%7.72%Between €80,000 and €120,000

Key facts:

Among the 10 locations with an entry threshold of less than €80,000, Tenerife’s capital stands out with rental prices reaching a maximum of €10.2 per square meter per month at the end of July. Other cities, such as Jerez de la Frontera (€8), Sagunto (€7.7), Talavera de la Reina (€6), and Alcoy (€6.1), also registered record rental prices.

Elda, offering the highest gross yield among the most affordable investments at 11.14%, has the lowest rental price on this list at €5.2 per square meter per month. The same price applies to Linares, followed by Ferrol and Villarreal (both €5.7). Reus completes the top 10 with a rental cost of €7.9.

In total, 15 out of the 35 analyzed municipalities had maximum rental prices by the end of July. Madrid is at the top of the list with €17.1 per square meter per month, requiring housing investments ranging from €120,000 to €200,000. Valencia (€12) and Alicante (€10.2) follow among the capitals. However, the list also includes cities around major metropolises such as Getafe (€11.7), Coslada (€10.6), and Fuenlabrada (€10.5). On the other hand, Parla offers the highest profitability, nearly 14% annually, with investments ranging from €120,000 to €200,000 and an average rental price of €9.4 per square meter per month.

Investing in rental properties in Spain can be a lucrative venture, especially in the mentioned locations. With a diverse range of options, both in terms of entry price and potential return, investors have the opportunity to find the right investment strategy that suits their budget and financial goals. Whether one prefers the affordable yet profitable investments of Elda or the higher rental prices and returns in Madrid, the Spanish rental market offers a variety of possibilities for investors to explore.

It is essential, however, for potential investors to carefully consider factors such as market demand, local regulations, and property management to ensure long-term success. By conducting thorough research and seeking professional advice, investors can make informed decisions and maximize their profits in the Spanish real estate market.

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