Costa Blanca North Rental Investments: Returns on Rental Income

Your rental strategy fundamentally shapes your returns. Both approaches work on the Costa Blanca North, but they serve different investor profiles.

Holiday Rentals (Short-Term)

Holiday rentals maximise income during peak season. Well-positioned apartments in Jávea or Calpe can achieve €1,500–2,500 per week in July and August. Shoulder seasons (May–June, September–October) typically bring €900–1,400 weekly. The catch: you'll face significant seasonal gaps, management workload, and strict licensing requirements.

Long-Term Rentals (12+ Months)

Long-term lets provide stable, predictable income. A two-bedroom apartment in Denia or Altea might rent for €800–1,200 monthly on an annual contract. Lower headline income, but consistent occupancy, minimal management, and no tourist licence complications.

Some investors pursue a mixed strategy: holiday rentals during high season, then a six-month winter let to expats seeking sunshine escapes. This requires flexibility and careful planning but can optimise total annual income.

Gross rental yields on the Costa Blanca North typically range from 4% to 7% depending on property type, location, and rental strategy. Prime areas like Moraira and Jávea's Arenal sometimes achieve lower yields (3–5%) because property prices are higher, while Denia and Calpe can reach 5–7%.

Net yields are what actually matter—and they're significantly lower. After property taxes (IBI), community fees, non-resident income tax, utilities, maintenance, cleaning, and management fees, expect net returns of 2–4% on holiday rentals. Long-term lets can achieve slightly higher net yields due to lower operating costs.

Costs That Erode Returns

Every rental investor should budget for these ongoing expenses:

Tourist Licence Requirements

Holiday rentals in the Valencian Community require a tourist licence (Licencia Turística). Rules vary by municipality—some towns on the Costa Blanca North have suspended new licences in certain areas. Never buy a property assuming you'll get a licence. Verify licensing availability before purchase, ideally with a lawyer who specialises in property transactions.

Operating without a licence risks fines of €30,000–600,000. Some buyers purchase properties with existing licences attached, though these must be properly transferred.

Best Property Types for Rental Investment

Not all properties perform equally as rentals. On the Costa Blanca North, the strongest performers are typically:

• Two-bedroom apartments with pools and air conditioning—broad appeal, manageable costs
• Properties within walking distance of beaches, restaurants, and amenities
• Modern or recently renovated properties—guests expect good kitchens and bathrooms

Larger villas can achieve impressive weekly rates but often struggle with occupancy and carry higher running costs. For pure investment returns, compact apartments often outperform sprawling villas.

Common Investment Mistakes

The most frequent errors investors make include: overestimating rental income based on best-case scenarios, ignoring licensing requirements until it's too late, underbudgeting running costs by 30–50%, and choosing locations they personally love rather than what tenants actually want.

Professional guidance from a local lawyer and accountant pays for itself many times over.

The Costa Blanca North remains attractive for rental investment, but success requires realistic expectations and thorough due diligence. Gross yields of 4–7% are achievable; net returns of 2–4% are more typical once all costs are factored in.

The strongest opportunities combine steady rental demand with long-term capital appreciation—coastal Spain continues to benefit from limited supply and sustained international interest. But this isn't a passive income stream. Active management, regulatory compliance, and ongoing costs all require attention.

For investors who do their homework, choose properties wisely, and budget conservatively, the Costa Blanca North offers a genuine combination of lifestyle benefits and investment returns. Just don't expect the glossy brochure projections to match reality.