Costa del Sol Rental Yields 2025: A Comprehensive Analysis

1. Short-Term vs. Long-Term Rental Investments: An Overview

The Costa del Sol rental market in 2025 remains highly attractive to property investors, offering opportunities across both the tourist (short-term) and long-term segments. Tourist rentals generate gross yields of 7-14% and net 3%-6% after taxes and additional costs. Higher yields locations: Estepona, Mijas, Casares, Manilva. These properties require more intensive management and are more sensitive to both seasonality and regulation. Long-term rentals, on the other hand, offer more predictable gross yields—typically between 3.5% and 6%—alongside considerably lower operating costs and tenant turnover.

Location continues to be the chief driver of rental values and investment performance, with Málaga and Marbella delivering the strongest results across both rental categories. Beachfront properties notably command higher prices in both markets, with premiums of 30–50% for tourist rentals and 15–30% for long-term rentals, even surpassing that in a handful of ultra-prime locations.

2. Tourist Rental Market: Demand, Pricing, and Yields

The tourist market is buoyed by Costa del Sol’s continued strong appeal, with 13.8 million visitors expected in 2025. This demand translates to robust occupancy and healthy daily rates in all principal towns.

Daily Rates by City and Property Type

Premiums apply for private pools (+25–35%) and sea views (+15–25%). The most popular rental formats for short-term guests are 2-bedroom apartments and 3–4-bedroom villas with gardens or terraces.

Tourist Rental Yields by Area

• Marbella & Málaga: 5–7% (occasionally up to 8–9% for premium, prime properties)
• Estepona, Fuengirola, Torremolinos, Benalmádena, Nerja: 4–6%
• Average yield across the region in early 2025: 5.6% (down slightly from 5.93% in late 2024)

Beachfront and amenity-rich properties outperform, often enjoying an additional 0.5–1.5% yield advantage.

Seasonal Effects

• High Season (July–August): Rates 40–60% above annual averages; occupancy 85–95%
• Shoulder Season (June, September): Rates 20–35% above average
• Low Season (Nov–March): Rates 25–40% below average; occupancy often 35–50%
• Holiday Peaks (Christmas/New Year): Short-term premiums and occupancy surges
• Emerging patterns: May is showing sustained demand at 5–15% above annual average prices

Location Premiums

• Beachfront/First Line: 30–50% higher than similar inland properties (up to 80% in Marbella’s Golden Mile for exceptional cases)
• Walking Distance (5–10 min): 15–30% premium
• Near Beach (10–20 min): 5–15% premium

3. Long-Term Rental Market: Supply, Yields, and Stability

The long-term rental market has tightened further, with supply down by 15% between 2024 and 2025 and recent years of consistent price appreciation.

Monthly Rental Price Ranges

Average price per square meter runs from €14.15 in Fuengirola to €18.65 in Marbella, and select areas in Nueva Andalucía (Marbella) can exceed €19.90/m². Annual rental price growth ranges 3.8–10.6% region-wide.

Long-Term Gross Yields

• Málaga: 4.5–5.6% (up to 10%+ in specific affordable neighborhoods such as Palma-Palmilla, but with higher risk)
• Marbella: 3.5–5.0% (lower yields in luxury/prime due to high purchase prices)
• Estepona, Fuengirola, Torremolinos, Benalmádena: 4.0–5.5%
• Nerja: 4.0–5.0%

Suburban areas and affordable districts generally yield 1–2% above city centers but may carry additional risk.

Beach Premiums (Long-Term)

• Marbella: 25–40%
• Málaga, Estepona: 20–35%
• Fuengirola/Benalmádena: 15–30%
• Torremolinos, Nerja: 15–25%
• Walking distance to beach: 10–15% premium

Seasonality

Seasonality for long-term leases is muted compared to tourist lets:

• Peak Season (June–Sept): Highest new contract prices (+10–15%)
• Shoulder/Low Season (Nov–March): Contract prices can be 15–40% lower
• Málaga city remains the most stable market; Marbella sees more pronounced swings

4. Comparing Short-Term and Long-Term Strategies

Financial Returns and Risks

• Tourist rentals: Higher gross yields (typically 4–7%, max 8–9% in premium) but with pronounced seasonality, higher management costs (15–25% in fees, high cleaning/maintenance), regulatory hurdles, and income variability (annual occupancy 55–85%).
• Long-term rentals: Lower gross yields (3.5–6%), much lower operating costs (5–10% management fees, repairs usually by tenant, stable occupancy 90–100% with brief vacancy periods), and stronger regulatory protections for tenants.

Property Types: Most Profitable Configurations

Tourist/Short-Term:

• Studios and 1-bed apartments (50–70 m²): Highest yield per m², ideal for couples/digital nomads
• 2-bed apartments (80–100 m²): Strongest overall demand
• Beachfront/sea-view, or with private pool: Command the highest rates

Long-Term:

• 2–3 bed apartments (90–120 m²): Most sought after by families and working professionals
• Properties near international schools/public transportation: Attract expatriate tenants
• Newly built or renovated units: Command 15–25% premiums over older stock

5. The Regulatory Landscape

Recent regulatory changes are reshaping market dynamics:

• Decree 31/2024 (Feb 2024): Stricter requirements for tourist licenses

     Effect: Properties with existing tourist licenses gain clear competitive advantages; new market entry is increasingly challenging

• Malaga and Fuengirola have already banned new tourist licenses, and old licenses are no longer transferable to new buyers.

6. Emerging Trends for 2025

• Digital nomads and international remote workers: Blurring lines between short and long-term rentals, creating demand for furnished medium-term (1–6 month) lets
• Ongoing conversion of long-term to tourist rentals: In Marbella, up to 60% of rental properties are now tourist lets, further constraining supply for residents