Spain’s Rental Gold Rush: Five Cities Pay Over 7% – And It’s Not Madrid Or Barcelona

Spain’s rental market is still moving hot, and that power is throwing disconnected returns that would person looked punchy moreover a twelvemonth ago.

With proviso tight and request still queuing information nan block, tenants are emotion nan compression – but for owners weighing a buy-to-let, nan numbers are getting harder to ignore. Fresh figures from spot portal pisos.com put nan mean gross rental output astatine 6.74 per cent successful July 2025, up from 6.04 per cent a twelvemonth earlier and nudging supra June’s 6.68 per cent. Put simply: a modular 90 m² level bought for €216,810 and fto astatine €1,218 a period would person thrown disconnected €14,623 successful gross yearly income. That’s earlier costs, of course, but it’s a motion of really overmuch nan calculus has shifted successful owners’ favour arsenic asking rents ratchet up.

Buy-to-let hotspots: Tarragona tops nan table

Here’s nan twist: nan biggest returns aren’t successful nan biggest cities. In July, Tarragona led Spain’s buy-to-let leaderboard pinch a striking 8.07 per cent yield. Close down came Jaén (7.35 per cent), Ávila (7.10 per cent), Castellón de la Plana (7.05 per cent) and Córdoba (7.05 per cent) – each clearing that eye-catching 7 per cent threshold. What links these markets isn’t hype; it’s value. Purchase prices stay comparatively accessible, while section request has proved resilient – a blend that lets rent screen much of nan owe and past some. For galore would-be landlords, that’s nan saccharine spot: you’re not betting connected trophy-city superior gains to make nan numbers work, you’re banking connected dependable occupancy and a sensible price-to-rent ratio.

There’s besides a applicable constituent that gets mislaid successful nan sound of header postcodes. Smaller provincial capitals often travel pinch less bidding wars, little speculative froth and a tenant guidelines that’s much need-driven than trend-led. When nan output is doing nan dense lifting, that stableness matters. It’s not glamorous – and that’s precisely why nan maths tin look truthful good. The connection from July’s array is unambiguous: if income is your northbound star, mid-sized cities are punching good supra their weight.

Glamour trap: why San Sebastián, Palma and Málaga underperform

At nan different extremity of nan spectrum beryllium immoderate of Spain’s astir coveted destinations — and they’re precisely wherever yields look thinnest. Donostia–San Sebastián posted a humble 3.67 per cent, pinch Palma (4.35 per cent), Pamplona (4.59 per cent), Cádiz (4.60 per cent) and Málaga (4.63 per cent) besides lagging nan nationalist average. None of this intends they’re ‘bad’ markets; it intends acquisition prices person raced up of achievable long-let rents, compressing nan return for income-focused buyers.

It’s nan classical glamour trap. You salary a premium for nan postcard position and nan brand-name postcode, but erstwhile you tally a blimpish buy-to-let spreadsheet — owe costs, tax, insurance, work charges, maintenance, nan overseas month’s void — that header rent abruptly doesn’t agelong arsenic acold arsenic you hoped. If your scheme relies connected flawless occupancy and fierce rent rises conscionable to scrape a target return, nan marketplace is telling you to look elsewhere. Spain has nary shortage of charismatic coastal and practice cities; nan instrumentality is uncovering nan ones wherever nan introduction value hasn’t already priced retired nan yield.

Madrid vs Barcelona: What nan large 2 are whispering to investors

Spain’s heavyweights are inching successful different ways, but nan takeaway is similar: yields are edging up, conscionable not into nan seven-per-cent stratosphere. Barcelona improved from 6.78 per cent successful June to 6.88per cent successful July, while Madrid ticked from 4.93 per cent to 5.03 per cent, according to pisos.com’s caput of investigation Ferran Font. That divided tells you plentifulness astir each city’s starting point. Barcelona already sits successful patient mid-six territory, which suggests rents are doing useful activity against precocious acquisition costs. Madrid crossing nan 5% statement is notable excessively — a psychological milestone that will tempt buyers who’d written it disconnected arsenic excessively pricey for income.

For landlords deciding wherever to works their flag, nan instruction isn’t “avoid nan large two”. It’s to beryllium clear astir your goal. If you want liquidity, extent of tenant request and nan reassurance that comes pinch globally known markets, Madrid and Barcelona will ever person their fans — and rightly so. But if your privilege is monthly rate flow, July’s leaderboard says nan champion bang-for-buck is extracurricular nan accustomed suspects. In a twelvemonth wherever nan nationalist mean has climbed 70 ground points, nan spread betwixt “nice to own” and “pays for itself” has seldom been clearer.

There are, arsenic ever, a fewer housekeeping notes earlier you get carried away. Gross output isn’t nett yield. Factor successful organization fees, IBI (council tax), landlord insurance, ineligible costs, attraction and immoderate financing. Budget for realistic voids — not each tenancy turns complete for illustration clockwork — and support a cushion for compliance upgrades. If you’re targeting student-heavy cities, cheque nan world almanac and churn patterns; if you’re tempted by tourer hotspots, retrieve that long-let yields (the ones we’re discussing here) don’t needfully move successful lockstep pinch short-let dynamics.

Still, nan guidance of recreation is difficult to miss. With nan mean gross output astatine 6.74 per cent and 5 capitals clearing 7 per cent, Spain’s rental marketplace is serving up an unusually generous model for income-minded investors. Tenants won’t cheer that reality, and policymakers whitethorn yet effort to tinker astatine nan edges. But for owners sitting connected an quiet location – aliases buyers prepared to look beyond nan glossy postcards – 2025’s mid-tier representation looks rich | pinch opportunity. The clever money isn’t chasing nan shiniest skyline; it’s pursuing nan yield.

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