Spain, at present, continues to be one of the most attractive destinations for real estate investors, due to its economic stability, its privileged climate and its growing demand for tourist and residential rentals. In this year 2025, the Spanish real estate market presents varied opportunities both in large cities and in emerging destinations, where profitability can even exceed 6% per annum in some cases.
In this article you will find an analysis of the 10 Spanish cities that are positioned as the most profitable to invest in this year 2025, taking into consideration factors such as rental demand and tax incentives. In addition, we will be exploring the risks associated with each area and the appropriate strategies to maximize the return on investment.
Spain is a country with a secure legal framework for national and foreign investors, as well as clear regulations for the purchase and sale of properties. In addition, its economy has shown a good resistance even in the face of global crises, with a sustained growth of the Gross Domestic Product and a tourism sector that is in constant expansion.
The boom in tourism and increase in teleworking has increased the demand for housing both for short term use (such as the model used by Airbnb) as well as for long term rentals. Cities such as Barcelona, Madrid and Malaga are currently leading this market, but there are also emerging destinations such as Valencia and Alicante, which offer the possibility of achieving high returns.
It is estimated that in some areas of Spain, property revaluation has experienced an increase of up to 10% per year in the value of homes, especially in areas close to the coast and in university towns or near tourist areas, all of which have a constant influx of inhabitants for both long and short term rentals.
You can take advantage of some benefits such as favorable taxation, with taxes such as personal income tax and corporate income tax, which have reduced rates for non-residents in certain autonomous communities. In addition, you can also take advantage of deductions for rehabilitation, which are aids for renovating old houses, especially in areas such as historic centers.
You may be interested in: investing in tourist apartments.
Tourist areas and university towns can guarantee a high occupancy of both short and long term rentals, as they have attractions for constant visitors or students who require rentals for periods of 9 to 12 months per year.
In cities such as Granada you can find properties with low prices and yields that reach up to 7 to 8% approximately.
If a property is located close to infrastructure such as airports and high-speed trains, it can increase its value.
Many communities have clear regulations on vacation rentals, which guarantees greater security for this type of real estate business model.
Cities with a great cultural heritage and beaches have a much higher revaluation, and can even take advantage of the possibilities offered by the tourism projects under development, which will allow properties of even low value to increase their value once these projects are in operation.
In this city we can find an average profitability of 4 to 6% in traditional rentals, and up to 8% in tourist rentals. The key areas to consider are Chamberí, Salamanca and areas close to universities. It has the advantage of being an economic capital with a high demand for offices and housing.
The profitability in Barcelona is 5 to 7% in rent, although it is an area with stricter regulations in the tourist area. The best areas to invest can be Eixample, Gràcia and Poblenou. And its greatest advantage is to have a high international appeal and a strong labor market.
It has a profitability of approximately 6 to 9% in traditional rents. The areas that stand out are the historic center and Pedregalejo, and its greatest advantages are the good climate, the presence of an international airport and the growth of digital nomads.
In Valencia, residential rentals can have a yield of 5 to 7%. Prices here are more affordable than in other areas, such as Barcelona and Madrid, and the key areas for investment are Ruzafa, El Carmen and Malvarrosa beaches.
Here, traditional rentals reach a yield of 5 to 6%, with key areas such as Triana and the historic center. It has advantages such as a great cultural heritage and strong tourism.
In this area, the profitability of vacation rentals is very good, reaching 7 to 10%, with key areas such as Playa de San Juan and the center. A good advantage is the low cost of living and that it has a large tourist influx.
You may be interested in: Best neighborhoods in Alicante.
The profitability in Bilbao for residential rentals ranges from 4 to 6%. The key areas for investment are Indautxu and Deusto, and it is a place that has the advantages of having an industrial economy and a high quality of life.
In this city, the profitability is 7 to 9%, especially good in student rental models. The key areas are the center and Zaidín. It has the advantage that there are properties for low prices and that there is a constant demand for rentals due to the number of university students.
In Palma de Mallorca you can find an area of luxury tourism, with high seasonality. The profitability is 6 to 8% in vacation rentals and the key areas are Santa Catalina and Portixol.
In Zaragoza you can gain a return of 5 to 6% in residential rentals, with key areas such as Delicias and downtown, we find a good strategic location and affordable prices.
We invite you to take a look at our projects: real estate investment in Madrid, real estate investment in Alicante, real estate investment in Zaragoza and real estate investment in Valencia.
In Madrid and Barcelona it is good to invest in apartments in central areas for professional rental, while in Malaga and Alicante tourist apartments near the beach bring good returns.
In Granada and Salamanca, studios and apartments for students are in great demand, and in areas such as Palma de Mallorca, luxury villas for holiday rentals can be an excellent investment option.
Large cities may offer greater liquidity, but towns such as Cadiz, Gijon or Marbella can offer higher returns with a lower initial investment.
It is necessary to investigate the tourist rental regulations in the area before making an investment.
Although they are seen as attractive options, it is always good to avoid oversupplied areas.
It may be a good idea to hire management companies for vacation properties.
It is always necessary to make studies in the local market before buying.
If possible, it is a good idea to diversify the investment among several cities and property types.
It may be a wise decision to hire experts who can help with tax and legal issues.
Granada and Alicante stand out especially for their low prices and high profitability.
Yes, as long as they have advantages such as high tourist attractiveness or constant university demand.
The IBI (Real Estate Tax), the IRPF (for non-residents) and the Municipal Capital Gains Tax.
Yes, it is possible, but in that case it is recommended to have the help of a local manager.
If the property is close to services such as transportation, schools or tourist locations, this increases its value. It is also possible to choose locations close to projects under development that will provide a future revaluation.
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Spain remains a very attractive real estate market in 2025, with varied opportunities in tourist, residential and student rentals. Cities such as Malaga, Alicante and Granada can offer high returns, while other alternatives such as Madrid and Barcelona can guarantee long-term security,
If you are looking to maximize your real estate investment, you should analyze each market, diversify your options and take advantage of the tax incentives available to you. All you have to do is take heart, because the ideal time to invest in Spain may be right now.
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Funded:
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Objective:
3.582.749,16 €
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