Investing in Spanish real estate

Investing in Spanish property offers numerous benefits, including vibrant lifestyle, favorable climate, and diverse cultural experiences. Financially, the Spanish real estate market has shown resilience and potential for significant returns, making it an attractive option investors. With a growing demand for rental properties especially in tourist hotspots, you can expect steady income and capital appreciation over time. Overall, investing in Spain can be rewarding venture for both personal enjoyment and financial growth.

Spanish real estate is considered a strong, high-yield investment in 2026, driven by rising property values (projected 7% growth in 2026) and high rental demand, with average gross yields between 6.5% and 7.5%

Key areas on the Costa del Sol are Marbella region and Estepona which offer attractive opportunities for both long-term appreciation and rental income.

Key Aspects of Spanish Real Estate Investment linked to vacation letting:

Market Trends: Property prices are experiencing a steady, positive cycle, with a record high average of €2,438/m² in June 2025, notes Idealista.
Rental Yields: Investors can expect robust returns, particularly in tourist-heavy areas and major cities, where short-term and long-term rentals are in high demand, say GuestReady.
Foreign Investment: International interest is high, with foreign buyers accounting for a significant portion of transactions, offering diverse opportunities from holiday homes to new builds.

To achieve maximum returns from your rental marketing it is important to choose a location where people want to spent their holidays. Buying a property one hours drive from the coast because its a lot cheaper, you will find it a challenge to achieve a high rental count, get repeat bookings, or an average high booking fee. Few if any inland vacation rental properties could be termed a profitable investment.

Villa or apartment.

Apartments generally offer better, more consistent rental yields and lower maintenance, making them ideal for stable, year-round income in urban areas, together with a lower buy-in costs. Strong possibility of building a portfolio.

Villas, while having lower overall demand, excel in generating higher, premium nightly rates, especially in vacation hotspots for high-end, short-term rentals.

Luxury Potential: Command higher nightly/weekly rates.
Niche Market: Better for tourists and luxury traveler's.
High buy-in cost.
Higher Expenses: Require more maintenance and, often, higher taxes.
More costly and difficult marketing as you are targeting a smaller elite group of people.