Hello everyone, there’s been a growing discussion on the forum lately about property investment. Many people are asking the same question: which city in Spain is the most profitable for buying a property to rent out? I just came across a report on rental yields, so I’ve summarized it to share with you all. Hopefully, it can help those of you who are undecided.
This data is primarily based on the latest quarterly report on Spanish property yields published by the major Spanish property platform, Idealista. It calculates the gross rental yield, which is the annual rental income divided by the total property price. It doesn’t deduct various taxes and maintenance costs, but it’s still very valuable for a side-by-side comparison.
Overview of Rental Yields in Major Spanish Cities 2024
| City | Average Gross Rental Yield |
|---|
| Murcia | 7.9% |
| Valencia | 7.2% |
| Zaragoza | 6.8% |
| Barcelona | 5.8% |
| Madrid | 5.2% |
As you can see from the table, Madrid and Barcelona, contrary to what many might assume, do not have the highest yields. Instead, second-tier cities like Valencia and Murcia show impressive performance. The reason is quite simple: property prices in Madrid and Barcelona are extremely high. Although rents are also substantial, the large initial investment drags down the yield percentage. Meanwhile, Valencia’s popularity has been soaring in recent years, both as a tourist destination and a place to live, leading to strong rental demand. With its property prices still being relatively affordable, the return on investment is naturally higher.
This is just macroeconomic data. The yield can vary significantly depending on the specific district and property type within each city. For example, a student apartment in central Madrid and a large villa in the suburbs are completely different concepts in terms of returns. Therefore, this ranking of Spanish property ROI should only be used as a general guide for real estate investment returns, and should not be the sole criterion for investment. What are your thoughts? Are there any members who have invested in these cities and can share their real-world experiences?
