The Best Cities in Spain for Buy-to-Let Investments
The best cities in Spain for buy-to-let investments offer a powerful combination of rental yield, property appreciation, and legal stability for international investors. Whether you’re a first-time buyer or a seasoned landlord seeking to expand your portfolio, choosing the right location is one of the most critical decisions you’ll make. Spain’s diverse real estate landscape provides opportunities for both conservative income seekers and higher-risk value investors—if you know where to look.
Why location matters in Spanish buy-to-let investments
Spain’s real estate performance varies significantly by region, property type, and rental model (short-term, mid-term, long-term). While some cities deliver strong gross yields, others offer more capital growth or regulatory clarity. At Buy-to-Let Spain, we help non-resident investors find optimal locations based on goals like:
- Consistent monthly income
- Low vacancy rates
- Tax efficiency and non-resident compliance
- Medium- to long-term capital appreciation
Let’s explore the top cities that meet these criteria.
Madrid: stable demand and growing returns
As Spain’s capital and largest metropolitan area, Madrid continues to be a solid choice for investors focused on long-term tenancy or executive mid-term rentals.
Key facts:
- Average gross yield: 5–6% in central districts
- High demand from students, professionals, and international workers
- Strong public infrastructure and legal transparency
- Growing interest in co-living and student housing formats
Districts like Chamberí, Tetuán, and Arganzuela combine rental stability with growing regeneration projects. Madrid is also a top option for investors seeking financing, with local banks offering favourable terms for buy-to-let properties in prime areas.
Valencia: fast-growing mid-term hotspot
Valencia has become one of the most dynamic property markets in Spain, appealing to remote workers, students, and international relocators seeking quality of life.
Why investors love it:
- Average property prices are still accessible (20–30% below Madrid or Barcelona)
- Yields of 6–8% in areas like Ruzafa, Benimaclet, or Patraix
- Consistent demand for 3–6 month rentals from digital nomads
- Strong urban development, public transport and walkability
Valencia is also friendly to non-residents and has more flexible rental laws compared to heavily restricted cities like Barcelona.
Málaga and the Costa del Sol: lifestyle meets yield
Málaga, Marbella, and surrounding towns continue to attract foreign capital thanks to their mix of tourism, lifestyle appeal, and rental profitability.
Ideal for:
- Mid- to high-end investors seeking capital preservation and income
- Short- and mid-term letting, especially in areas with tourist or golf appeal
- Diversification into lifestyle-focused portfolios
While tourist licensing is increasingly regulated, Buy-to-Let Spain helps you navigate legal zones and mid-term models that maintain strong returns with fewer restrictions.
Seville: cultural capital with untapped value
Seville combines deep cultural heritage with a growing student and young professional population, making it ideal for mid-tier investors.
Investment profile:
- Strong local demand for modernised units
- Yields ranging from 6–7.5% in Triana, Nervión, and La Macarena
- Lower acquisition costs compared to coastal hubs
- Less oversupply than in popular coastal destinations
Buyers who modernise older flats can benefit from value-add opportunities in a city poised for further growth.
Alicante: overlooked income generator
While often viewed as a tourist destination, Alicante offers excellent buy-to-let conditions:
- Property values below national average
- Consistent demand from expats and retirees
- Long-term and winter letting opportunities
- Tourist and mid-term licensing available in many zones
Alicante is ideal for conservative investors seeking stable income in a more relaxed market with lower regulatory barriers.
Barcelona: high demand, complex regulation
Barcelona remains one of the most visited and dynamic cities in Europe—but also one of the most regulated. For buy-to-let investors, this presents both risk and opportunity.
Considerations:
- High property values and strong rental demand
- Tourist licensing largely frozen for new applications
- Limited availability for short-term lets, creating mid-term potential
- Premium returns in niche segments like student housing and co-living
Investors should partner with experienced advisors to ensure legal compliance and avoid missteps that could impact returns or lead to penalties.
Bilbao and Zaragoza: emerging inland value
For investors with a keen eye on value, Bilbao (in the Basque Country) and Zaragoza (in Aragón) offer interesting yield-focused opportunities.
Benefits:
- Purchase prices under €120,000 in many districts
- Rental yields between 6–9% depending on unit type and location
- Untapped demand from local professionals and students
- Low entry barriers and limited international competition
These cities are ideal for smaller portfolio builders or investors seeking geographic diversification within Spain.
Comparing buy-to-let cities in Spain: key metrics
| City | Avg. Yield | Rental Model Fit | Entry Cost (approx.) | Legal Complexity |
|---|---|---|---|---|
| Madrid | 5–6% | Long-term, mid-term | High | Low |
| Valencia | 6–8% | Mid-term, student | Medium | Low |
| Málaga | 5–7% | Mid-term, lifestyle | Medium–High | Medium |
| Seville | 6–7.5% | Mid-term, local demand | Medium | Low |
| Alicante | 5.5–6.5% | Long-term, winter lets | Low–Medium | Low |
| Barcelona | 5–6.5% | Mid-term, niche lets | High | High |
| Bilbao | 6–8% | Mid/long-term | Low–Medium | Low |
| Zaragoza | 6–9% | Long-term | Low | Low |
FAQs for international buy-to-let investors
Do non-residents face restrictions in certain Spanish cities?
Non-residents can purchase freely across Spain, but some cities limit short-term rental licences. Buy-to-Let Spain helps you navigate compliant strategies with mid-term or long-term focus.
Where can I get the best rental yields in Spain?
Cities like Valencia, Zaragoza, and Bilbao currently offer the highest yields for well-selected properties. Higher-end markets like Madrid or Marbella provide more capital appreciation and tenant stability.
Is it better to invest in one city or build a multi-city portfolio?
Diversifying across multiple cities helps reduce risk and balance yield, occupancy, and legal exposure. Many of our clients combine Madrid or Valencia with a coastal or emerging inland market.
What services do I need to manage a property from abroad?
You’ll need legal, tax, and property management partners. Buy-to-Let Spain provides comprehensive advisory, from sourcing and legal structuring to hands-off operations.
Choose your city. Then choose your strategy.
Selecting the best city for your buy-to-let investment in Spain is the first step—but long-term profitability depends on more than location. Working with expert advisors ensures your investment aligns with your goals, complies with legal frameworks, and generates real income.
Book your strategic consultation with Buy-to-Let Spain and get tailored recommendations based on your budget, yield targets, and risk profile. We’ll guide you to the right city—and the right property—to grow your portfolio with confidence.
→ Schedule your 1:1 Strategy Session (€500) today and start investing with clarity.