Investments for those who want to buy a home to rent out
About renting out your home in Spain – this is how much you can expect to earn
We have had many clients ask us about the possibilities for renting out their home in Spain. Most real estate agents, booking agencies, etc. tend to be down on these numbers because there are never any guarantees. However, we thought it would be appropriate to shed some light on this subject of renting out your Spanish home in 2026. How much you can expect to earn in income for different types of homes, what to consider even before you buy the home, the pitfalls of renting out yourself, how much fees rental agencies charge, etc.
Examples of income from renting out different types of housing
Note that when using concrete figures as we do below, it can easily be interpreted as a “guaranteed return”. But there are never any guarantees. So it is an “expected return” in the examples. There are some players who offer guaranteed income, but it is very rare for these projects to bring in more than the guaranteed amount (around 5%).
We have Nerja as a starting point for our examples as Nerja is a town that was not hit as hard by the crisis as the rest of Costa del Sol. It is true that sales and rentals also fell there during the crisis years, but not to the same extent. There are no so-called ghost areas in Nerja . For example, if you strike (more on that below) with a cheap bank repossession in a less popular area, regardless of where in Spain, you risk not getting it rented at all, which you lose in the long run (plus, property value growth will be worse).
Rental rates are higher in most areas of Nerja than they have ever been. This has a lot to do with Nerja now also being popular during the winter months. In addition, prices have risen sharply during inflation in recent years. Given Spain's relatively strong development in most sectors, we expect price increases to continue to increase sharply in 2025 and 2026.
Newly built 2 bedroom penthouse, Ladera del Mar (sales price €400,000), Nerja. Based on figures from two years ago and the number of bookings for 2024 until the autumn (when we were given access to them) and in combination with average monthly prices [July €1136 per week. August €1558. March €558. October €926.] with an occupancy rate (the client also uses the apartment themselves a few weeks a year) of 40 booked weeks a year, it brings in around €42,000 gross per year.
Used townhouse in good condition in Burrianaarea (sales price approximately €470,000) 3 bedrooms bring in over €30,000 per year.
Examples of slightly cheaper housing: Capistrano Village, is an example of a popular holiday area in Nerja that brings in good money regardless of the world situation etc. When we last looked at figures for such an apartment, you can expect approx. €20,000 per year in income for a 1 bedroom apartment in Capistrano Village and over €25,000 for a 2 bedroom apartment in the same area. After the pandemic, however, it is clear that guests are now starting to look for more modern, newly built properties to rent. Keep in mind when investing that it will become increasingly difficult to get a high occupancy rate in older homes the closer we get to the 30s. Capistrano will always be popular, however.
The rental company takes about 20-40% (in some cases 10-15% if you bring the customer yourself, for example an acquaintance who wants to rent, or an ad via Blocket) for everything around, the rest you get to keep. However, there are no requirements, there never are, that you have to rent out your apartment through them. For most people, however, it is unsustainable to handle everything on your own at home from Sweden.
Airbnb is an increasingly popular way to rent out your home.
Another example, for investors with a lot of money is luxury apartmentr (with the pandemic, interest in luxury properties , or large homes in general, has increased significantly) at a beach in Nerja (Carabeo) that cost 800,000 Euros and brought in 50,000 Euros per year in rentals already in 2012. A few years later it brought in around 85,000 Euros. Today it probably brings in a bit over 100,000 Euros. A really good net return in other words. Nerja is a bit unique in the way that it attracts families with children on a budget but also rich Britons, Germans and Russians.
A segment that is increasingly interesting for investors is luxury villas in the upper price range. These can bring in very large sums during certain periods of the year. However, it is important to have a rental company that has its finger on the pulse and can lower the price and run a campaign when necessary to get it rented out as much as possible during the year. When it comes to luxury accommodation, the line between bringing in x number of thousand € in a month and nothing is very thin. Read an actual example from 2019 of a luxury villa in Nueva Andalucia, Marbella (expect about 30% higher revenue now).
The rest of Spain then? On average, you can expect to rent out a 2-bedroom apartment in Torrevieja on the Costa Blanca, near the beach, 22 weeks (it's still very high, most resorts in Spain don't come close to 22 weeks) per year. According to the latest report we received from a major rental company in Torrevieja, occupancy rate (largely due to countries like Turkey losing tourists who choose the cheaper resorts in Spain instead) will be closer to 25 weeks in the future. Occupancy Rate in Nerja is over 40 weeks per year.
In areas such as the Canary Islands, Mallorca and Barcelona, there are strict restrictions on rentals so these areas are not of interest to serious investors.
The area that attracts the most investors right now and this is just the beginning according to most observers, is Malaga city (for both rental and value increase ). A big advantage of Malaga is that even in the event that tourism drops sharply for various reasons, it is always easy to rent out the property to companies, lawyers, doctors, etc. There is a lot of pressure on housing in the city and prices are also starting to skyrocket even on housing on the outskirts of the city. A major drawback is the restrictions on renting which was introduced in several of the city's zones in 2025. This makes it more difficult to find your way around Malaga city. For an easier and safer investment, Nerjais therefore recommended.
It is also good to know that tax on rental income dropped to 19% (It was 24.75% for a long time. You can also make deductions for maintenance, home insurance, and anything else that can be traced back to your rental business.
You can still make a tax deduction for home renovations in Spain.
The above figures are averages and may change, up or down (which seems highly unlikely), but they illustrate the fact that if you want to make money from your home in Spain, it should be located in the so-called “ frontline beach ” or in a popular holiday area like Capistrano Village. Incidentally, none of the homes in the examples cost less than €170,000. Which brings us to the next topic.
As for really cheap bank repossession They were a bit hyped in the Swedish media for a while. 99 percent of all bank repossession are located in areas where it can be difficult to rent out. They are therefore not interesting for investors who want to draw in passive income through rentals ( property value growth on these bank-repossessed properties will also most likely be low), but if you are going to work and live in Spain you can still find a real bargain through the banks.
These areas are best for rental apartments and houses
Now it is parts of Malaga (parts of the central parts, the historic quarters and Limonar/Malagueta) that attract the most investors. The trend is that more and more people choose to have Malaga as a base for their holiday on Costa del Sol. It is simply the most convenient as all public transport connections start from Malaga. Read more about the potential of Malaga in this article.
Costa del Sol dominated new ranking list in summer 23of the most popular destinations in Spain – Nerja at the top.
Top 15 rankings from Spain experts "Spain-Holiday" and Holdu:
According to a study by the organizers of the SIMA property fair in Madrid, interest in investing in vacation homes is on the rise. They found that vacation rental investors increased from 21% of attendees two years ago to 34% today, while regular rental investors fell from 77% to 64%. The new housing law is one of the factors driving property investors away from long-term to short-term and vacation rentals.
According to figures from Spanish authorities, overall rental prices in Malagaprovince rose faster than anywhere else in Spain between 2015 and 2020. 13.8% compared to the national average of 10.9%. Since then, they have increased even more.
Occupancy Rate figures for July 2022 were 86.29%, which can be compared to 2019 when the figure was 84.2%. It is mainly Nerja and Torremolinos that beat 2019 as they raise the average. Nerja has the highest occupancy rate with 94.46% (compared to Marbella and other resorts on the west side which are just over 80%).
Although tourism is breaking records in many places in the most attractive areas, it is decreasing in inland areas (note that these areas had a boost during the pandemic, but are now starting to decline in popularity). Even if you do not intend to rent out your home, you should take the rental statistics into account as they strongly correlate with the price development of homes. Nerja became the best city to invest in already during the last crisis, which it came through well and became stronger than before. The resolute action of Nerja municipality with all the offensive investments in hiking trails, natural parks and infrastructure during the pandemic years means that the city is stronger than ever for the rest of the 2020s . We have said it before and these figures make us say it again with extra emphasis. If you are going to invest, do it in Nerja or one of the growing parts of Malaga city.
Some residential areas, or holiday villages, have their own booking companies that take care of the maintenance, marketing (often to the whole of Europe) and ensuring that your accommodation is kept in good condition, etc. In addition, there are rental companies that will add your house or apartment to their pool if they deem it to be rentable.
Wealth tax is being abolished in Andalusia (previously, anyone who owned a home in Andalusia for over €700,000 paid an additional wealth tax). From 2023, Andalusia (Malaga, Nerja, Marbella etc.) will have among the lowest regional taxes in Europe. This, combined with investments in sustainable tourism, improving infrastructure, and new laws and regulations that attract international high-tech companies such as Google has put Andalusia on the map for investors. This part of Spain, which was long the “cousin from the country”, is now best in class.
So what are the new benefits of living in Andalusia now?
Maximum income tax of 26% for investment income. In fact, tax rates are between 19% and 23% unless investment profits exceed €200,000.
Expanded deductions for rental income. Income is calculated after deducting all related expenses, including interest expenses on loans.
Almost no inheritance tax and gift tax for close family members.
People who permanently move to Spain from other countries can eliminate inheritance tax and gift tax permanently.
Private pensions can be treated as investment income, with the income being the difference between the amounts invested and the amounts withdrawn. In some cases, the tax can be as low as 2.5% of the income withdrawn.
A full range of international tax treaties that ensure that double taxation almost never occurs.
New statistics show that the number of private homes rented out short-term to tourists now makes up nearly 57 percent of the total holiday beds on Costa del Sol
Figures from 2023
Since 2019, the number of tourist beds in the province Málagahas increased by a whopping 48 percent and is currently around 514,000. The number of hotels has increased and in February this year there were 898 registered, but what has increased the most is the number of beds offered in private homes rented out for short periodsThey currently amount to 291,674, distributed among 62,394 residences. The number of tourist beds later broke a record in 2024.
One of the sectors that is growing the most in the wake of the corona pandemic is luxury properties (which was a trend we flagged early on). It is not only the sale of luxury properties in Marbella and the surrounding area that is breaking records, but more and more wealthy people are also looking for exclusive rental properties to holiday on Costa del Sol. Demand has risen in the sector by around 30 percent. In addition, the wealthiest customers are increasingly demanding a wider range of services, which are not limited to accommodation, cleaning and cooking. These customers are often spending around 6,000 euros a day on their holiday, which can be compared to the average among ordinary tourists on the coast, which is said to be around 100 euros per day.
If you are going to rent out your home yourself, keep in mind that:
Follow all the laws and regulations regarding rentals that apply in your particular residential area, city and province. The fines can be quite severe in most parts of Spain if you do not follow the laws regarding licenses, etc. We help with all of this in the areas that are of greatest interest to investors.
You must register all guests at the Guardia Civil with a passport copya within a certain period of time. If you do not follow the procedure to the letter, the fines can be very high.
How much you manage the rental yourself is entirely up to you. We can provide tips and advice on the best marketing channels and which factors are important (for example, amenities/equipment/furnishings) to attract tenants. We can also put you in touch with a rental company.
Advertising, and collecting payment etc. from tenants are no big problems. The most important thing in the scenario that you want to take care of everything yourself is that you hire a reliable cleaning company, and that you establish contact with a caretaker or company that can look over your home from time to time, or in case of emergency. Key management, if it is not handled by a third party, can be solved, for example, via key boxes with a code, or a door that does not have a key lock but only opens via a code.
Also make sure you have a Swede (based in Sweden or Spain) who knows how to file your tax return.
If you are not good at taking photos, or simply don't have the equipment (most modern smartphones will get you far), hire a professional photographer. Photos are very important in this context, and studies show that ads with attractive images can increase their conversion by over 40% (our own data confirms this)!
Avoid photos with wrinkled sheets, crooked paintings, and burnt-out lights. Use high-resolution photos, but optimized for the web, so they don't slow down loading times (which is especially a problem for mobile users).
Headlines and descriptions are just as important. People these days expect as much information as possible in the advertisement (max number of guests, sq m, kitchen equipment, etc).
A booking calendar is necessary. However, most advertising portals offer such services. There are also relatively cheap alternatives if you want to have a booking calendar on your own website. There are also good and cheap payment solutions nowadays where everything is included (possibility for the customer to pay online via card, or OCR number on paper invoice, or bank transfer, etc.). It has never been easier to run a more or less self-sufficient business on the side, which generates passive income.
About problems that may arise if you want to rent out your home
Those who try to rent out on their own can often encounter a problem when, for example, they rent for a long time and the tenant cannot pay. Spanish laws, like Swedish ones, are often in favor of the tenant.
Another problem can be if the tenant destroys the interior. Where do you draw the line for normal wear and tear for those who have rented for a long time? The advantage of having a company that takes care of it all is that they have control over the home, and require clients to pay for lost keys, etc. If a guest destroys the interior, the rental company charges the bill for the repairs to the customer's credit card (which they must provide when booking). Home insurance does cover this type of damage.
As you can see, the right apartment, or house, in the right place on Costa Del Sol can provide really nice income in the first year. However, keep in mind that you should not under any circumstances buy a home in Spain and depend on rental income to pay your mortgage.
We are happy to answer questions about this with the rental part in Spain, and where the top picks are right now on the Spanish housing market. Write to info@spanskafastigheter.se then we'll tell you more.
Many Swedes right now want to buy but find the market confusing and don't really know what to invest in. Maybe it's because the most important thing for you is to get a home in the sun and warmth, and not the direct yield. Whatever your goals are with your purchase, we advise you not to wait too long before taking action. Houses and apartments in the popular segments (2 bedrooms, sea view , fairly close to town center ) in the popular resorts are starting to sell out. For us, and for other brokers, the problem for the rest of the 2020s will not be getting clients but getting the type of listing they are looking for.
If you wait too long without making a decision, it becomes easy, as it did for the French philosopher Buridan's donkeyYou know, the hungry donkey that starved to death because she couldn't decide which of the haystacks to eat. They all looked so alike.
Our task is to guide you to a purchase that is right for you, your preferences and circumstances. Our head realtor has lived on Costa del Sol for almost 20 years and has been through both the ups and downs. In other words, he has a very good grasp of the situation.
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