How Long Does It Take to Recoup an Investment in a Property in Spain? (2025 Guide)

Learn how many years it takes to break even on a Spanish property investment in 2025. Explore average rental yields, payback periods, the best cities to invest in, and expert insights to guide your strategy.

Spanish Property Investment: What to Know in 2025

If you're considering investing in Spanish property in 2025, there's one question you should ask first: how many years will it take for a rental property to pay for itself?

With the market showing signs of long-term stability and rental demand remaining strong across most regions, residential real estate continues to offer reliable returns. That said, profitability timelines vary widely depending on the location, property characteristics, and macroeconomic conditions.

Average Rental Yield in Spain (2025)

According to the Banco de España and property platform Idealista, the average gross rental yield in Spain in 2025 is 6.4%. This means it typically takes about 16 years to recover the initial investment in a buy-to-let apartment, assuming full occupancy and consistent rental income.

This is a modest improvement from 2023, driven by strong demand for rentals and limited housing supply in key urban areas.

Key Factors That Affect Profitability

Several strategic variables influence how quickly a Spanish property becomes profitable::

1. Location

Well-connected central neighborhoods in cities like Madrid, Valencia, or Seville typically enjoy lower vacancy rates and stronger rental prices.

2. Price per Square Meter

In 2025, the national average price is approximately €2,050/m², but this figure varies significantly by region. Identifying undervalued locations is crucial to maximizing return.

3. Rental Demand and Tenant Profiles

Urban areas near universities, business districts, and tourist centers generally offer consistent demand and higher rental yields, which shorten payback periods.

4. Capital Appreciation

Long-term investors should also assess the area's historical and projected property value trends. A steadily appreciating asset can boost overall return on investment (ROI) beyond rental income alone.

Best and Worst Cities to Invest in Spain (2025)

Top-Performing Markets

• Valencia stands out with yields above 7% and an average payback time of 14 years.

• Other attractive cities include Murcia, Zaragoza, and Seville, where property prices remain accessible and tenant demand is robust.

High-Cost, Low-Yield Markets

• San Sebastián is one of the least profitable investment locations, with property prices over €5,000/m² and yields below 3.7%. The average payback time exceeds 27 years.

  
  

Tip: Mid-sized cities with growing economies and student populations often provide the best combination of affordability, rental demand, and capital growth potential.

2025 Forecast: Is Real Estate Still a Safe Investment?

Yes — but it requires a careful, data-driven approach.

While mortgage rates remain influenced by the recent Euribor peak (2023–2024), they are beginning to stabilize in 2025. At the same time, tighter credit conditions for buyers and rising mobility are fueling continued demand for rental housing.

Property prices are expected to grow at a steady pace, particularly in suburban areas, logistics corridors, and tourism-driven markets.

Expert Insight

“It’s not solely about gross yield. The intelligent investor considers revaluation potential, rental stability, and general liquidity,” says Marta Rivas, market analyst at Brainsre.

Real Estate Investment Strategies for 2025

• Focus on cities with strong rental demand and limited new supply.

• Factor in all costs, including taxes, insurance, HOA fees, and maintenance.

• Consider expanding into secondary cities with long-term growth potential.

• Adopt a long-term perspective — holding for 10+ years allows time for appreciation and smoother returns through market cycles.

Interested in Investing in Spanish Property?

Now that you understand the profitability timeline for real estate in Spain, it's the perfect time to explore high-performing markets and make a data-backed investment decision.