Rental Income Reality
What Costa Blanca Rental Income Really Looks Like
Gross yields look great on paper. After taxes, management, and maintenance, here's what expat buyers actually earn from Costa Blanca rental property.
Is Costa Blanca Good for Rental Income?
Beachfront sounds perfect. It's often a trap.
A €300,000 beachfront apartment in a saturated resort might pull 4% gross. A €200,000 property 2km inland, close to the Alicante airport corridor, can clear 5.5% gross with lower buying costs and less competition. Rental income depends on location, but not in the way most buyers expect.
Costa Blanca has strong fundamentals for rental income. Over 300 days of sunshine and cheap flights from across Europe mean tourists come from March through October. The expat community is large and well-established, so finding property managers, accountants, and lawyers who speak your language isn't difficult. Short-term rental demand from northern European tourists is real, and occupancy rates of 60-80% are achievable during peak season in well-located properties.
The Valencia region requires a tourist licence (licencia turística) for short-term rentals, and some municipalities have stopped issuing new ones. Competition from Airbnb has pushed nightly rates down in oversaturated areas. If you're buying from abroad, add property management costs (8-12% of income), currency risk if you earn in GBP or NOK, and Spanish tax obligations on every euro of rental income.
The numbers still work for many buyers. But only with realistic expectations and proper research upfront.
What a 250K Apartment Actually Costs
Most property articles quote gross yields: rental income divided by purchase price, nothing else. That number ignores buying costs, running costs, tax, and vacancy periods. Here's what a real investment looks like.
This is a long-term, modest-return investment. If someone promises you 7%+ net yields, they're either wrong or selling something. The real upside? Property values across Costa Blanca have risen 5-8% annually in recent years. Rental income covers your running costs and generates a return, but capital growth is where the bigger gains tend to happen.
Use our rental income calculator to run your own numbers.
Where to Buy for Rental Income
Yields vary dramatically across Costa Blanca. The south generally offers higher yields at lower entry prices, but with more competition. The north commands premium nightly rates, though purchase prices are higher and winter occupancy drops significantly.
| Area | Price Range | Gross Yield | Best For |
|---|---|---|---|
| Torrevieja | €180-280K | 5-6% | Budget investors, long-term holds |
| Orihuela Costa | €200-350K | 5-7% | Lifestyle + income blend |
| Guardamar del Segura | €200-300K | 5.5-6.5% | Less competition, growing demand |
| Calpe | €300-500K+ | 4-5% | Lifestyle + modest returns |
| Benidorm | €200-400K | 5-6% | Hands-off investors |
| Jávea & Moraira | €400-800K+ | 3-4% | Capital growth, not income |
Torrevieja and Benidorm lead on occupancy because of year-round demand and affordable entry points. Guardamar is increasingly popular with Scandinavian and Dutch buyers looking for quieter alternatives. Jávea and Moraira attract weekly villa rates of €1,500-€3,000, but winter occupancy drops below 20%.
For property type, two-bedroom apartments within 1-2km of the beach with communal pools consistently perform best. New builds with modern amenities command higher nightly rates. Villas with private pools earn premium rates but cost more to maintain and manage remotely. Avoid studios in city centers and anything needing major renovation unless you can oversee the work locally.
Read our property selection guide for more on what works across different price ranges.
The Expat Reality
Get Your NIE Number
Apply for your Número de Identidad de Extranjero. Required for buying property, paying tax, and signing rental contracts. Apply at a Spanish consulate or at a police station in Spain.
Open a Spanish Bank Account
You need a local account for community fees, utility bills, tax payments, and receiving rental income from guests or your property manager.
Apply for a Tourist Licence
Short-term rentals in the Valencia region require a licencia turística. Apply early because processing takes 2-6 months.
Hire a Property Manager
They handle guest check-ins, cleaning, maintenance, and communication. Budget 10-15% of your rental income for this service.
Register with Hacienda
Register with the Spanish tax authority and file quarterly rental income declarations. A local gestor (tax advisor) costs €300-€600 per year.
Non-resident rental income is taxed at 19% for EU/EEA nationals (who can deduct expenses) or 24% for non-EU owners (taxed on gross income, no deductions). If you earn in GBP, NOK, or USD, factor in exchange rate movement. A 5% currency swing can eat a full year's net income on a modest yield.
Get legal advice before you commit. A good lawyer costs €1,500-€3,000 and will save you significantly more in avoided mistakes. See our costs and taxes guide for the full breakdown of what you'll pay.
Ready to Run the Numbers?
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