Rental yield on the Costa Blanca: real numbers

The Costa Blanca has been on European property investors' radar for years. Sun, prices below Madrid or Barcelona, sustained tourist demand and an international community that keeps growing. But between the developer's brochure and market reality there is a gap that only numbers can fill. This article is that gap.

What yield means and how it is calculated

Before talking figures, the concepts need clarifying:

• Gross yield: annual rent divided by purchase price, multiplied by 100. No expenses included. This is the number that appears in headlines and portals. Example: a flat bought for €120 000 generating €7 200 a year in rent has a gross yield of 6 %.
• Net yield: the same calculation, but subtracting from the annual rent all costs: community fees, IBI (property tax), insurance, maintenance, void periods, letting management. In practice, net yield is typically 1.5 to 2.5 percentage points lower than gross.
• ROI (return on investment): also factors in acquisition costs (taxes, notary, registry, legal fees — 10 % to 13 % of the price). The most realistic figure, but the least used in property marketing.

In this article we use gross yield as the main benchmark because it allows comparison across zones and sources, but always with a caveat: subtract 1.5 to 2.5 points to approach the net reality.

The big picture: Alicante in 2025-2026

According to Idealista data, gross residential yield in Alicante province stands at 6.2 % in early 2026. It has dropped slightly from previous years — not because rents are falling, but because purchase prices have risen faster than rents. Prices climbed roughly 13 % year-on-year in 2025, a pace unlikely to persist indefinitely.

For context: offices yield 7.7 %, commercial premises 9.9 % and garages 4.9 %. Housing sits in between, but with a key advantage: demand for residential lettings does not depend on commercial cycles — people always need somewhere to live.

Yield by rental type

Long-term letting

The most stable option. A tenant who signs for a year or more pays between €500 and €900 a month for a two-bedroom flat in areas like Benalúa, San Vicente del Raspeig or central Torrevieja. Occupancy is high (90-95 % per year), management is low and turnover costs are minimal.

Typical gross yield: 4 %-6 %. Not spectacular, but predictable. For investors seeking passive income with minimal effort, it is the most sensible choice.

Holiday (tourist) letting

The most profitable — if managed well. An apartment in Benidorm, Calpe or Jávea can generate between €800 and €1 500 per week in peak season (July-September). In the off-season, occupancy drops to 30-40 %, but with active management and proper platform positioning, the annual average reaches 60-75 % occupancy.

Typical gross yield: 6 %-10 %. But with an important nuance: costs are higher (cleaning, utilities, platform management, linen rotation, more frequent maintenance), so net yield may not differ from long-term letting as much as the gross figure suggests.

Regulation of tourist accommodation (VUT) has also tightened in the Valencian Community. Obtaining a tourist licence is possible but requires meeting specific habitability, insurance and registration requirements.

Medium-term letting

The growing hybrid. Contracts of 1 to 6 months for relocated workers, digital nomads or families in transition. It combines higher rents than long-term with lower turnover than holiday letting. An expanding niche in areas like Alicante city, San Juan and El Campello.

Yield by zone

Investing in Torrevieja is not the same as investing in Jávea. The numbers change according to entry price, local demand and the dominant rental type:

• Torrevieja: gross yield of 7 %-9 %. Purchase prices are among the coast's lowest (€1 800-2 200/m²), while rental demand is sustained by the huge international community. Risk: seasonal tourism dependence and variable construction quality.
• Benidorm: gross yield of 6 %-8 %. Year-round tourist occupancy is high (80 %). Higher purchase prices (€2 500-3 500/m²), but weekly income in peak season compensates.
• Alicante city (Benalúa, Centre, Ensanche): gross yield of 6 %-7.5 %. Combines long-term demand (professionals, students) with occasional tourism. Moderate purchase prices (€1 800-2 800/m²).
• Calpe and Altea: gross yield of 6 %-7 %. Established tourist market, but entry prices are already elevated (€2 800-3 700/m²). Yield is offset by steady appreciation.
• Jávea and Moraira: gross yield of 4 %-6 %. Premium market: high prices (€3 200-5 000+/m²), high rents but proportionally smaller. Here the investment case rests more on appreciation than current income.
• Santa Pola and Guardamar: gross yield of 6 %-8 %. Accessible prices (€1 500-2 600/m²), growing tourist demand and good appreciation prospects.
• Orihuela Costa: gross yield of 5 %-7 %. Pool-and-golf urbanisations attract a stable audience, but seasonality is pronounced outside the resident community.

The costs nobody mentions

Between gross and net yield lies a list of expenses worth quantifying before buying:

• IBI (property tax): €300 to €800 annually depending on municipality and cadastral value.
• Community fees: €40 to €150 monthly. Urbanisations with pools and gardens sit at the higher end.
• Home insurance: €150 to €400 annually.
• Maintenance and repairs: budget 1 %-2 % of the property value per year as a contingency fund.
• Letting management: if you delegate to an agency, 8 % to 15 % of monthly rent (more for holiday lets).
• Void periods: even with good occupancy, budget 5 %-10 % void annually for long-term and 25 %-40 % for holiday lets outside peak season.
• Income tax (IRPF or IRNR): residents are taxed on net rental income; non-residents pay 19 % (EU) or 24 % (non-EU) on gross rent, with limited deductions.

Yield versus appreciation

A common mistake is evaluating an investment solely on rental yield. On the Costa Blanca, property appreciation is the other engine of return. A flat bought in Benalúa in 2020 for €100 000 may be worth €140 000-150 000 today. Rental yield has been 6 % a year, but capital growth has added 8-10 % annually. The combined total return exceeds 14 % a year — a figure few financial assets have matched over the same period.

That said, appreciation is not guaranteed. Cycles exist, and the 13 % annual pace of 2025 is not sustainable indefinitely. Investing expecting only appreciation is speculating; investing with a solid rental income that covers costs and generates cash flow is investing.

Frequently asked questions

How much money do I need to start investing?

A functional rental apartment in areas like Torrevieja or Guardamar can be found from €80 000-100 000. Adding acquisition costs (10-13 %) and a basic renovation if needed, total outlay is around €100 000-130 000. For premium zones like Jávea or Altea, the entry point rises to €200 000-300 000.

Is holiday or long-term letting better?

It depends on your profile. If you can manage actively (or pay someone to) and the property is in a tourist zone with a VUT licence, holiday letting yields more gross. If you prefer predictable income with minimal management, long-term is more efficient net. Medium-term letting (1-6 months) is an interesting compromise gaining traction.

What taxes do I pay as a non-resident owner?

EU non-residents pay 19 % on net rental income (gross rent minus deductible expenses). Non-EU non-residents pay 24 % on gross rent with no expense deductions. There is also a deemed income tax on the property even when it is not rented. Always consult a specialist tax adviser.

How does tourist accommodation regulation affect things?

The Valencian Community requires a tourist licence (VUT) for short-stay lets. Requirements include habitability certification, civil liability insurance, registration on the Generalitat's portal and reporting guest data to the authorities. Without a licence, tourist letting is illegal and can carry significant fines.

Which zone has the best yield-to-risk ratio?

There is no universal answer, but the best-balanced zones tend to combine moderate entry prices, sustained demand (not only tourist) and good connectivity. Alicante city (Benalúa, Centre), El Campello and Santa Pola offer that profile. Torrevieja has the highest yield, but with greater dependence on seasonal tourism.

If you are considering investing on the Costa Blanca, explore our available properties or contact us for a personalised consultation.