How much can you earn from renting out property?

Real numbers of 2026. 

How much can you earn from renting?

Renting residential property in Spain is a profitable and, most importantly, stable source of income. Many investors choose Spanish real estate due to the high demand for rentals, especially in coastal regions and major cities. In this article, we will detail how much you can earn from renting housing in Valencia, Spain, what factors influence profitability, compare it with other regions, and discuss where the financial edge lies for greater return on investment (ROI).

 

A brief table of contents for what you will find in this article:

– Why Spain and Valencia?

– Types of rentals

– Rental income in different cities

– Expenses associated with such investments

– A real example of income calculation

– What else you can earn by owning property in Spain

– Individual investment calculation

 

Why Spain and specifically Valencia is a profitable direction for renting residential property?

Spain ranks in the top 5 countries in Europe for rental income. The reasons are obvious:

• • High tourist flow year-round

• • Moderate climate and developed infrastructure

• • Demand for long-term rentals among expats and students

• • Favorable tax system for rental income
  • Valencia ranked 1st in the Expat City Ranking by InterNations in 2022 and 2024, and 3rd in 2023.. 

 

 Types of residential property rentals:

1. long-term apartment rentals (conditionally from 11 months) – ROI 5-9%* per annum. Less hassle, less time needed for tenants, no need to hire someone to manage the property. Repairs are needed less frequently. 90-100% occupancy per year
2. short-term (daily rental) – ROI 7-12%* per annum. More hassle, more time needed for tenants, need to hire someone to manage the property. Repairs are often needed. 65-85% occupancy per year.

3. medium-term room rentals (1-11 months and longer) ROI 6-10%* per annum. A lot of hassle, average time needed for tenants, need to hire someone to manage the property. Repairs are often needed. 65-85% occupancy per year.

 

*ROI figures are stated before tax deductions.

How much can you earn from renting in different cities in Spain

Let’s consider several locations primarily on the coast, as these areas are the most popular.   

1. Average rental price in long-term:

• • Valencia: 1,600 € per month

• • Barcelona: 2,500 € per month

• • Madrid:  1,500 – 2,500 € per month

• • Alicante/Torrevieja: 600 – 1,200 € per month

Return on investment from long-term rentals (ROI) averages 5–9% per annum.

2. Short-term rental (tourist)

Renting an apartment or house for a short period through platforms like Airbnb or Booking is one of the most profitable formats, especially in resort areas and large cities such as Valencia, Barcelona, Madrid, Alicante, Malaga.

Average income:

• • • • Valencia: 2,500 € per month
      • Barcelona: 3,000 € per month
      • Madrid: 2,500 € per month
  • • • Torrevieja/Alicante: 1,600 – 1,800 € per month 

Return on investment from short-term rentals (ROI) averages 7–12% per annum.

 

Important: for tourist rentals, a tourist license (Licencia de vivienda turística or Licencia de uso turístico) is required. In some regions, it is not difficult to obtain, while in some popular areas, it is currently impossible. For example, in Valencia and Madrid, there is a moratorium on issuing tourist licenses for renting residential properties.

 

Example of income calculation from renting

You purchased an apartment in Valencia for 210,000 €. Renting it out long-term for 1,300 €/month, your annual income will be:

1,300 € × 12 = 15,600 € per year.
Yield: 15,600 / 210,000 × 100 = 7.42% per annum (excluding taxes and expenses)

If the same property is rented out short-term for 100 €/night and occupied 20 days a month:

100 × 20 × 12 = 24,000 € per year.
Yield — 11.42% (excluding taxes and expenses)

What affects rental income?

1. 1. Location — closer to the sea, city center, or universities — higher rates
   2. Type of property — studios and 1-bedroom apartments are especially in demand for medium-term rentals. 2-4 bedroom apartments are more sought after for long-term rentals.
   3. Condition and interior — good repairs and stylish design significantly increase the rental price for long-term rentals.
   4. Seasonality — in summer, short-term rental income in resort areas can be 2–3 times higher

What expenses should investors consider besides the purchase price of the property?

• • Utility payments (community fees)

• • Maintenance and repairs

• • Management company services (if applicable)

• • Income taxes (averaging 19–24%)

• • Expenses for obtaining a tourist license (if applicable)

Taxes and expenses

When renting property in Spain, it is necessary to consider taxes and current expenses:

• • Rental income tax: For non-residents — 24%, for residents — progressive IRPF scale.

• • Annual property tax: 0.2% of the cadastral value.

• • Municipal tax: 0.08%.

• • Utility payments: 500–1000 euros per year for apartments, 500–1200 euros for villas.

Recommendations for investors

1. 1. Choose liquid properties: Small apartments in popular tourist areas or student cities. Or 2-3 bedroom apartments with an elevator and balcony in a good area of the city or nearby suburb.
   2. Obtain a tourist license: This is a mandatory requirement for short-term rentals in most regions.
   3. Work with professionals: The real estate agency SunLine real estate and tax consultants will help avoid mistakes and optimize income.
   4. Monitor the market: Rental prices and demand can change depending on the season and economic situation.

Where is it most profitable to rent out property?

The most profitable regions:

• • Valencia — a combination of tourist, economic, and educational demand

• • Barcelona and Madrid — high rental prices, but strict rental regulations

• • Alicante and Costa Blanca — high occupancy during the season

• • Malaga and Costa del Sol — popular with foreigners year-round

How to increase rental income?

• • Take professional photos and create a quality listing

• • Update the interior: lighting, furniture, decor

• • Consider a flexible rental model: daily in summer, long-term at other times

    But remember, in addition to rental income, property owners also earn from the appreciation of property value. According to statistical data, in 2025, the official price increase was approximately 7%. However, the real market increase in Valencia from 2022 to 2025 was 15% each year.

Want to know what income your property will generate?

The team SunLine real estate offers a free consultation to assess the profitability of your property in Valencia and other regions of Spain. We will help:

• • Assess the real market rental value

• • Find the ideal rental format

• • Take full management of the property

Leave a request — and we will tell you how to maximize the income from your property in Spain!
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