The rental market in Spain remains one of Europe’s strongest for investors in 2026. Demand continues to rise due to tourism, expat relocation, and a growing number of digital nomads. Understanding rental yields, top-performing cities, and market trends will help you maximise returns and choose the best strategy for your investment.
Short-Term vs Long-Term Rentals in Spain (2026)
Short-Term Rentals in Spain
Short-term rentals in Spain offer higher income potential, especially in cities with strong tourism. Areas such as Barcelona, Marbella, and Ibiza continue to attract millions of visitors every year. Consequently, nightly rates are higher—particularly from June to September—and annual returns often range between 5–10%.
However, stricter regulations apply in several major cities. Investors must obtain the appropriate tourist licence, and management costs tend to be higher, although the profit margin usually justifies the added expenses.
Long-Term Rentals in Spain
Long-term rentals provide stable and predictable income. Cities such as Madrid, Valencia, and Seville see strong demand from students, expats, and professionals. Additionally, long-term yields typically range from 3.5–6%, making this strategy attractive for conservative investors. Regulations are simpler compared to holiday rentals, and ongoing costs are lower, allowing you to maintain higher net returns.
Best Locations for Rental Income in Spain (2026)
Top Cities for High Rental Yields
Madrid: Consistent demand with rental yields of 4–6%.
Barcelona: Strong expat and tourism market with 3.5–5.5% yields.
Valencia: Growing rapidly due to affordability and lifestyle; yields of 5–7%.
Seville: Excellent mix of tourism and student population; 4–6% yields.
Top Coastal Markets for Holiday Rentals
Marbella & Costa del Sol: High-end demand, luxury villas, and 6–9% yields.
Ibiza & Mallorca: Premium nightly rates with strong year-round occupancy.
Alicante & Costa Blanca: Affordable entry prices and 5–7% yields.
Canary Islands: Year-round tourism supports consistent, reliable income.
Key Factors Affecting Rental Returns in Spain
Several elements influence performance in the rental market in Spain.
Seasonality remains the biggest driver of profit for short-term rentals. Meanwhile, regulations vary by city—Barcelona and Madrid have strict holiday rental rules, whereas Costa Blanca and many southern areas are more flexible. Furthermore, property type and amenities significantly impact rental pricing. Modern units with sea views, parking, pools, or terraces generate higher returns. Finally, management costs—typically 5–15%—should be considered when calculating net profit.
Final Thoughts
The rental market in Spain continues to offer excellent opportunities in 2026. Short-term rentals provide the highest yields in tourist hotspots, while long-term leases ensure stability and lower risk. By choosing high-demand areas, understanding local regulations, and optimising property management, investors can achieve strong rental income and long-term value growth.
