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What is the rental property market like in Spain?


The rental property market in Spain is in full swing. It has been increasing systematically for over five years, although growth levels differ significantly depending on the region of Spain where the specific property is located. On the Costa del Sol, the increase in rental prices in the second quarter reached almost 16%. However, it is worth noting that prices are still well below the levels recorded in the full boom, which is good news for potential investors.

Who rents out properties?

Many foreigners have recently invested in purchasing real estate in Spain. In addition, it is estimated that about 20% of Spaniards own a second house. In both cases, for the most part, these are holiday houses which are used only for a few weeks during a year. Expenses generated by these properties (rent, property taxes, utilities, etc.) can constitute an excessive burden on their owners. Therefore, many owners are looking for an alternative plan to earn some money or at least cover the running costs associated with owning a second property by renting it out while not in use. 

What are the rental options?

There are several options for renting out a property in Spain. Depending on the needs of the owner and the characteristics of the property, it can be rented out in three different ways:

  1. On a short-term basis (for days or weeks).
  2. On a temporary basis (for several months).
  3. On a traditional basis (long-term lease).

Each of the above-mentioned options has its pros and cons. However, the most important thing is that the rental should be the most suited to both the property itself and the needs of its owner. 

Property rental for tourists

This option is best for those owners who own a property in the most popular tourist destinations(coasts, big cities, islands) and do not plan to stay in it between May and October. Tourist rentals in a few weeks can cover the running costs associated with owning a property and, additionally, provide the owners with some extra money which they can use, for example, to pay for their holidays. The property rental in this form requires a tourist license approved by the autonomous community, and the property must meet several requirements, e.g.:

  • amenities, such as air-conditioning, Wi-Fi,
  • tourist information about the area,
  • permission from the community of owners.

The owner may deduct part of the fixed costs related to owning a property from the obtained income (proportionally to the number of days in which the property has been rented out). In this option it is required to have a capability of hosting and serving customers on an ongoing basis, registering them with the police, managing the housekeeping and being active on some Internet platforms. Therefore, if you choose this option, it will be best to contact us. We offer full service in this area!

Temporary rental (several weeks or months)

This is the way to achieve additional incomeand then use the apartment in the summer. The economic benefit is greater than in the case of long-term rental (although it is not so sure). Temporary rental offers are mainly addressed to pensioners coming from the north of Europe who travel off-season and are willing to pay a significant rent for a house or an apartment located on the Spanish coast in the autumn-winter months. Renting a property to the same tenant for a period of more than two months exempts the owner from the obligation to hold a tourist license.

“Worth considering: An interesting option and actually one of the most profitable for the owners is the combination of the options 1 and 2. With proper management, you will not only earn the money, but also you will have several days for your own use. The options 1 and 2 are chosen mainly by foreign owners or Spaniards who have more than one property in an attractive tourist destination.” (Klaudia Rakoczy)

Traditional rental

Traditional rental (from one to several years) is a form that ensures the greatest security and stability for the owner. Although the revenues generated by this type of rental have also increased in recent years, they are still significantly lower than those generated by the two previous options. In this case, some costs are transferred to the tenant (utilities), and the owner may also deduct part of the remaining maintenance costs when settling his income tax. The main disadvantage of this rental type is the absolute impossibility to use the property by the owner

Adjust the option to your needs

Each of the three above-mentioned options satisfies very different market and owner needs. Each owner, in addition to his preferences, should take into account the geographical location of the property and the legal regulations in the region in which the property is located. Our Team will be glad to help you learn and properly choose the best option for you.

See also

[PRIMARY MARKET] 2 modern apartments on the Costa del Sol at prices below 350,000. EUR

Do you want to buy a house in Spain? Here's what you need to know in 2024

Luxury real estate in Spain – this is worth knowing in 2024

Legal regulations for renting real estate in the most popular regions of Spain in 2024

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