What Rental Yield Can I Expect?
Gross rental yields of 4% to 6% are typical for new build apartments in Costa del Sol, with some well-positioned holiday rental properties achieving higher returns.
- 1Gross yields of 4-6% are typical for new build apartments in coastal locations
- 2Holiday rental income of 25,000 to 40,000 euros per year is achievable for well-positioned two-bedroom apartments
- 3Net yield after costs is typically 2-4%
- 4Long-term rental yields are lower gross but lower management costs
- 5Yield varies significantly by location, property type and management quality
Key Takeaways
- 4-6% gross yield is the typical benchmark for new build Costa del Sol
- Holiday rental can generate higher gross income in tourist-heavy areas
- Net yield is significantly lower than gross yield due to costs
- Location and property quality are the primary yield drivers
Gross rental yields for new build apartments in Costa del Sol typically range from 4% to 6%. Well-located two-bedroom apartments in tourist areas such as Fuengirola, Marbella, Estepona and Benalmadena achieving consistent holiday rental occupancy can generate 25,000 to 40,000 euros per year gross. Net yield after community fees, management costs, taxes and periods of vacancy typically runs 2% to 4%. Long-term rentals provide lower gross yield but lower management costs and more consistent income.
Holiday rental yield
The Costa del Sol's 320+ days of sunshine per year and strong international tourism base make holiday rental a natural income strategy for property owners. Well-managed two-bedroom apartments in popular locations typically achieve 14 to 20 weeks of rental occupation per year at nightly rates of 150 to 350 euros depending on season and location. Annual gross income of 25,000 to 45,000 euros is achievable for top-performing properties.
Long-term rental yield
Long-term rental (12-month contracts) typically achieves lower gross rental income than holiday rental but with significantly lower management costs and more consistent occupancy. A two-bedroom new build apartment let on a long-term basis might achieve 1,200 to 1,800 euros per month in popular areas, generating 14,400 to 21,600 euros per year gross.
What costs reduce net yield?
Community fees (1,200 to 6,000 euros per year), property management fees (typically 15% to 25% of gross rental income for holiday lets), annual property taxes (IBI), non-resident income tax, insurance, maintenance, and periods of void all reduce gross yield to net yield. A well-managed holiday rental property might achieve 3% to 4% net yield. A long-term rental might achieve 3% to 3.5% net yield.
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