Spain currently remains one of the most attractive destinations for real estate investors, thanks to its economic stability, favorable climate, and growing demand for tourist and residential rentals. The Spanish real estate market offers a variety of opportunities in both large cities and emerging destinations, where returns can exceed 6% per year in some cases.
In this article, you will find an analysis of the 10 Spanish cities that are ranked as the most profitable for investment in 2026, taking into account factors such as rental demand and tax incentives. In addition, we will explore the risks associated with each area and the appropriate strategies for maximizing return on investment.
Spain offers a secure legal framework for both national and foreign investors, with clear regulations governing property purchases and sales. In addition, the country’s economy has shown strong resilience even during global crises, with sustained GDP growth and a tourism sector that continues to expand steadily.
The growth of tourism and the rise of remote work have increased demand for housing for both short-term stays (such as Airbnb-style rentals) and long-term rentals. Cities such as Barcelona, Madrid, and Málaga are currently leading this trend. However, emerging destinations like Valencia and Alicante also offer strong potential for high returns.
It is estimated that in some areas of Spain, property values have experienced annual increases of up to 10%, particularly in coastal areas, university cities, or locations close to tourist zones. These areas tend to have a steady flow of residents and strong demand for both long-term and short-term rentals.
You can take advantage of certain benefits, such as favorable tax treatment, including personal income tax (IRPF) and corporate income tax, which offer reduced rates for non-residents in certain autonomous regions. In addition, you may also benefit from renovation tax deductions, which help reduce the cost of refurbishing older properties, especially in historic city centers.
You may be interested in: investing in tourist apartments.
Tourist areas and university cities can ensure high rental occupancy, both in short-term and long-term rentals, as they attract constant visitors or students who require housing for periods ranging from 9 to 12 months per year.
In cities such as Granada, it is possible to find properties with relatively low purchase prices and yields of approximately 7% to 8%.
If a property is located close to infrastructure such as airports or high-speed rail (AVE), its value may increase significantly.
Many communities have clear regulations governing vacation rentals, which provides greater legal certainty for this type of real estate business model.
Cities with a strong cultural heritage and beach access tend to experience higher property appreciation. They can also benefit from tourism development projects, allowing lower-value properties to significantly increase in value once these projects become operational.
In this city, average profitability ranges from 4% to 6% in traditional rentals, and can reach up to 8% in tourist rentals. Key areas to consider include Chamberí, Salamanca, and neighborhoods close to universities. The city benefits from being an economic capital with high demand for both office space and housing.
In Barcelona, rental profitability ranges from 5% to 7%. However, it is an area with stricter regulations in the tourist rental sector. The best areas to invest include Eixample, Gràcia, and Poblenou. Its greatest advantages are its strong international appeal and a solid labor market.
This city offers an estimated profitability of approximately 6% to 9% in traditional rentals. Key areas include the historic center and Pedregalejo. Its main advantages are the pleasant climate, the presence of an international airport, and the growing digital nomad community.
In Valencia, residential rentals can generate returns of 5% to 7%. Property prices are more affordable than in cities like Barcelona and Madrid, and key investment areas include Ruzafa, El Carmen, and Malvarrosa Beach.
Here, traditional rentals can achieve returns of 5% to 6%, with key areas such as Triana and the historic center. The city offers strong advantages, including rich cultural heritage and robust tourism.
In this area, vacation rental profitability is very strong, reaching between 7% and 10%. Key areas include Playa de San Juan and the city center. One major advantage is the low cost of living combined with a high tourist influx.
You may be interested in: Best neighborhoods in Alicante.
In Bilbao, returns on residential rentals range from 4% to 6%. Key investment areas include Indautxu and Deusto, known for their strong industrial economy and high quality of life.
In this city, returns range from 7% to 9%, particularly strong in student rental models. Key areas include the city center and Zaidín, which offer lower property prices and steady rental demand driven by the large student population.
In Palma de Mallorca, you can find luxury tourism areas with high seasonality. Returns range from 6% to 8% in vacation rentals, with key areas including Santa Catalina and Portixol.
In Zaragoza, residential rentals can generate returns of 5% to 6%. Key areas such as Delicias and the city center offer a strong strategic location and affordable prices.
We invite you to take a look at our projects: real estate investment in Madrid, Alicante, Zaragoza and Valencia.
In Madrid and Barcelona, investing in apartments in central areas for long-term rentals is a good option, while in Málaga and Alicante, tourist apartments near the beach can generate strong returns.
In Granada and Salamanca, studios and student apartments are in high demand, while in areas such as Palma de Mallorca, luxury villas for vacation rentals can be an excellent investment option.
Large cities may offer greater liquidity, but towns such as Cádiz, Gijón, or Marbella can deliver higher returns with a lower initial investment.
It is necessary to research local tourist rental regulations before making an investment.
Although they may seem like attractive options, it is always wise to avoid oversupplied areas.
It may be a good idea to hire property management companies for vacation rentals.
It is always necessary to research the local market before buying.
If possible, it is a good idea to diversify your investment across several cities and property types.
Hiring experts who can help with tax and legal matters can be a smart decision.
Granada and Alicante stand out in particular for their lower property prices and high profitability.
Yes, as long as they offer advantages such as strong tourist appeal or consistent university demand.
IBI (Property Tax), IRPF (for non-residents), and the Municipal Capital Gains Tax.
Yes, it is possible, but in that case it is recommended to have the support of a local property manager.
If a property is located close to services such as transportation, educational centers, or tourist areas, its value increases. It is also possible to opt for locations close to development projects, which can provide future appreciation.
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Spain remains a highly attractive real estate market, 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’re 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 the first step—the ideal time to invest in Spain may be right now.
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Funded:
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Objective:
1.057.019,75 €
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