Rental Yields Costa del Sol: What Investors Actually Earn

Gross yield is straightforward: annual rental income divided by purchase price. A €500,000 apartment generating €30,000 in annual rent produces a 6% gross yield. But gross yield tells you almost nothing about actual profitability. Net yield, what remains after all operating costs, management fees, taxes, maintenance, and vacancy, is typically 40–60% of the gross figure on the Costa del Sol.

The main deductions: property management (15–25% of gross rent for short-term, 8–12% for long-term), community fees (€1,200–18,000/year depending on the complex), IBI property tax (€800–6,000/year), basura (refuse tax, €200–400/year), income tax on rental profit (19% for EU residents, 24% for non-EU), maintenance reserve (5–10% of gross rent annually for repairs, replacements, and refreshes), insurance (€300–1,200/year), and utilities during vacancy periods (€100–200/month for base charges). A realistic Costa del Sol short-term rental net yield is 2.5–4.5% when all costs are properly accounted.

Short-term (holiday) rentals offer the highest gross yields but also the highest costs and the most regulation. The Golden Mile achieves €150–400/night for 2-bedroom apartments, with peak-season occupancy of 85–95% (June–September) dropping to 40–60% in winter. Annual gross yields: 5–8% for well-positioned, well-managed properties. Puerto Banús performs similarly for harbour-view units but drops more sharply for properties without a view premium.

Marbella centre and San Pedro deliver gross yields of 4–6% with nightly rates of €100–250 for 2-bedroom apartments. Occupancy is more stable year-round due to town-centre convenience. Estepona’s old town has emerged as a strong performer with gross yields of 5–7%, driven by lower purchase prices rather than premium rates. Mijas Costa and Benalmádena offer the highest gross yields (6–8%) because purchase prices are lowest, but these areas attract a different tourist demographic and management complexity increases with distance from Marbella.

New developments in Nueva Andalucía and La Quinta deliver gross yields of 3.5–5% because purchase prices are higher relative to achievable nightly rates. Golf properties have a specific advantage: they attract golf tourism in the shoulder season (March–May, September–November) when beach rentals are quiet, improving annual occupancy by 10–15 percentage points.

Long-term rentals (12-month contracts) on the Costa del Sol deliver gross yields of 3–5% with significantly lower management overhead. A 2-bedroom apartment in Marbella centre rents for €1,500–2,500/month long-term. In San Pedro: €1,200–1,800/month. Estepona: €900–1,500/month. Nueva Andalucía: €1,500–2,500/month for golf-area properties.

The net yield advantage of long-term over short-term is significant. Management fees drop to 8–12% (one tenant vs constant turnover), there are no cleaning costs between guests, no linen services, no key exchange logistics, and no seasonal marketing spend. Vacancy rates for well-priced long-term properties are essentially zero, demand from professionals, retirees, and digital nomads far exceeds supply. A long-term rental yielding 4% gross often nets 2.5–3.5% after costs, comparable to a short-term rental yielding 6–7% gross.

The trade-off: long-term tenants have significant legal protections under Spanish tenancy law (LAU). Evicting a non-paying tenant can take 6–12 months through the courts. Rent increases are capped at a reference index. And the property is not available for personal use during the contract term. Many investors choose mid-term (3–6 month) lets as a compromise, targeting corporate relocations and extended-stay visitors.

To legally operate a short-term rental in Andalucía, you need a VFT (Vivienda con Fines Turísticos) licence from the Junta de Andalucía. The requirements include: the property must have a Cédula de Habitabilidad (habitability certificate), each bedroom must have ventilation and natural light, air conditioning must be installed, and a complaints book must be available. The registration process takes 2–4 months and costs €500–1,500 through a gestoría.

The critical issue for investors is that Marbella municipality has restricted new VFT licences in areas of tourist saturation. Properties in the old town, Golden Mile beachfront complexes, and parts of Puerto Banús may not qualify for new licences. However, existing VFT licences transfer with the property on sale, buying a property with an active VFT is significantly more valuable than one without. Expect to pay a 5–15% premium for a property with a transferable VFT in a restricted zone. Estepona and Mijas remain more permissive, but the trend across all Costa del Sol municipalities is towards greater restriction.

Short-term rental management on the Costa del Sol typically charges 15–25% of gross rental income. The standard package includes guest communication, check-in/check-out, cleaning coordination, linen changes, minor maintenance, listing management on Airbnb/Booking.com, and monthly reporting. Premium services (concierge, airport transfers, in-property welcome packs) add 3–5% on top. Some managers charge a minimum monthly fee of €300–500 regardless of occupancy.

Long-term rental management charges 8–12% of monthly rent, covering tenant finding, contract preparation, rent collection, and maintenance coordination. One month’s rent as a finder’s fee for tenant placement is standard. For investors who self-manage from abroad, budget for annual property visits (€200–400/trip), a local maintenance contact (€40–60/hour for callouts), and accounting support (€600–1,200/year for rental tax returns). Self-management saves 8–15% but requires reliable local contacts and willingness to handle 3 a.m. plumbing emergencies remotely.

For pure yield: Estepona old town (€250–400K apartments, 5–7% gross) and Mijas Costa (€200–350K, 6–8% gross) offer the best numbers because purchase prices remain accessible relative to achievable rents. The risk is lower capital appreciation compared to premium Marbella locations.

For yield plus capital growth: San Pedro de Alcántara (€350–600K apartments, 4–6% gross) combines solid rental demand with the ongoing transformation of the beach boulevard area. New developments in eastern Estepona (€300–500K, 5–6% gross) benefit from infrastructure improvements and the expanding Estepona brand. For premium returns with higher entry cost: Golden Mile 2-bedroom apartments with VFT (€600K–1.2M, 5–8% gross) deliver both the highest nightly rates and strong capital appreciation, but require the largest investment and carry the highest community fees.

Golf properties in La Quinta and Los Flamingos (€400–800K, 4–6% gross) benefit from the unique shoulder-season golf tourism demand that smooths annual occupancy. For hands-off investment: new-build apartments with developer-managed rental pools in Estepona offer guaranteed yields of 3–4% with zero management overhead, lower returns but genuinely passive income.