Best places to invest in real estate in Spain for high yields

Investing in Spanish real estate has long been a popular choice for both local and international buyers. With strong rental demand, a thriving tourism sector, and relatively affordable property prices compared to other European countries, Spain offers attractive opportunities for investors looking for high rental yields and long-term capital growth. But where should you invest for the best returns?

We've analyzed the latest market trends and identified the best locations to maximize your real estate investment in Spain.

1. Valencia – a rising star for high yields

Valencia is emerging as one of the top cities for real estate investment in Spain. With rental yields averaging 6% to 8%, this coastal city offers a mix of affordable property prices and strong rental demand.

Downtown Valencia

• Why invest here? Valencia combines a high quality of life with relatively low property prices, making it attractive for both tourists and long-term renters.

• Best neighborhoods: Ruzafa, El Cabanyal, and Benimaclet are among the top investment areas, offering a balance of affordability and rental demand.

• Price range: Apartments start from €120,000, with strong appreciation potential.

2. Málaga – a tourist magnet with strong rental demand

Málaga, the capital of Costa del Sol, is not only a tourism hotspot but also a growing tech hub, drawing in both short-term visitors and long-term tenants. Rental yields in Málaga range between 5% and 7%, with strong occupancy rates due to year-round tourism and an increasing number of digital nomads.

Downtown Málaga in Andalusia (Spain)

• Why invest here? Tourism is booming, and the city’s infrastructure is improving, increasing property value.

• Best neighborhoods: Soho, La Malagueta, and Teatinos provide excellent investment opportunities.

• Price range: a small apartment in Málaga starts at €150,000, with luxury beachfront properties exceeding €500,000.

3. Madrid – stable and profitable investment

As Spain’s capital and economic powerhouse, Madrid offers solid rental yields between 4.5% and 6%, with consistent property appreciation. Demand is driven by professionals, students, and international expats, ensuring a steady stream of tenants.

Madrid's financial district and Paseo de la Castellana

• Why invest here? Madrid has a diversified economy and remains attractive for both long-term rentals and short-term Airbnb investments.

• Best neighborhoods: Tetuán, Vallecas, Arganzuela, and Carabanchel offer good affordability and high demand. Other central areas like Chamberí, Nueva España, Recoletos or Salamanca are also perfect if you have a high budget.

• Price range: entry-level properties start at €180,000, while central locations like Salamanca or Chamberí can exceed €500,000.

4. Alicante – affordable investment with high returns

Alicante has one of Spain’s most dynamic real estate markets, with rental yields reaching 6% to 9% in some areas. Its affordability makes it particularly attractive to investors on a budget.

Elche, coastal city in the province of Alicante.

• Why invest here? Strong expat community, growing tourism, and lower property prices compared to other coastal cities.

• Best neighborhoods: Playa de San Juan, El Campello, and the city center.

• Price range: apartments start at €100,000, making it an excellent choice for budget-conscious investors

5. Seville – a historic city with investment potential

Seville, the heart of Andalusia, offers rental yields of 5% to 7%, especially in areas popular with students and young professionals. The city’s strong cultural appeal makes it a favorite among tourists and long-term renters alike.

Seville's skyline

• Why invest here? Low property prices and a strong rental market fueled by tourism and a large student population.

• Best neighborhoods: Triana, La Macarena, and Nervión provide great investment potential.

• Price range: properties in Seville start at around €120,000, making it an affordable alternative to Madrid or Barcelona.

6. Gran Canaria – year-round rental demand in the Canary Islands

Gran Canaria, the most populated of the Canary Islands, is a favorite for holiday rentals, with some of the highest occupancy rates in Spain. Investors can achieve yields of 7% or more, particularly in popular tourist areas.

Mogán, coastal village in the south of Gran Canaria

• Why invest here? A strong short-term rental market due to year-round warm weather and high tourist numbers.

• Best neighborhoods: Maspalomas, Mogán and Las Palmas de Gran Canaria.

• Price range: investment properties start at €120,000, with beachfront homes commanding premium prices.

Conclusion: where should you invest?

Spain offers diverse opportunities for real estate investors, from affordable markets like Alicante and Valencia to high-end destinations like Madrid. Whether you’re seeking strong rental yields, capital appreciation, or a mix of both, these locations provide some of the best options for maximizing returns.

We help investors find the perfect property based on their budget, goals, and risk tolerance. Contact us today for expert guidance on securing the best real estate investment opportunities in Spain.

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or investment advice. Please consult a professional before making any real estate investment decisions.