Top 10 Spain Airbnb Markets to Invest

Spain offers a diverse mix of cultures and scenic beauty making it one of the most profitable Airbnb investment destinations. According to Reuters, Spain welcomed 42.5 million international visitors in the six months leading up to June, 2024 with June alone seeing a 12% increase, reaching 9 million arrivals as the peak summer season began. 

Whether you're a seasoned Airbnb host or a new investor, Spain offers a variety of lucrative markets, from vibrant cities to tranquil coastal towns. This article explores the top 10 Airbnb markets in Spain, providing insights to help you make informed decisions and maximize your returns.

Why Spain for Your Airbnb Investment?

Spain's real estate market is set to grow from $6.95 trillion in 2024 to $7.57 trillion by 2028, fueled by a 2.16% annual growth rate in the residential sector. Here's why Spain stands out for Airbnb investors:

• Attractive rental yields: Cities like Valencia, Málaga and Seville boast yields between 4% and 10%.

• Low seasonality: Consistent tourist demand ensures year-round rental income.

• Favorable financing options: Mortgage rates start at just 1.8% and the Golden Visa program offers residency for property investments over €500,000.

• Affordable property prices: Compared to other European countries, Spain offers excellent value for money.

With strong tourism, competitive pricing and the regional government's website outlining supportive regulations, Airbnb Spain remains a popular choice for short-term rental investments.

Considerations Before Investing in Airbnb in Spain

• Ensure you understand the laws regarding foreign property ownership in Spain, including any restrictions or additional paperwork required.

• Be aware that different regions in Spain have varying rules for short-term rentals. Research the specific requirements, such as registration, taxes and possible restrictions in the area you are interested in.

• Analyze the demand for short-term rentals in different Spanish cities. Consider factors like tourist attractions, business hubs and seasonal fluctuations.

• The success of your rental largely depends on its location. Proximity to major tourist sites, transport links and local amenities can significantly impact your rental's appeal, making the right location critical for maximizing returns.

• Evaluate the initial investment cost, including purchase price and any renovations needed. Also, consider ongoing expenses like maintenance, utilities and management.

• Investigate average rental yields in the area to estimate potential returns. Compare these with other investment opportunities to ensure competitiveness.

• Be aware of the tax obligations associated with owning and renting out a property in Spain, including income tax on rental earnings and local taxes.

• Decide whether you will manage the property yourself or hire a property management company, especially if you will not be based locally.

• Consider your long-term goals and exit strategy for the investment. This includes understanding the resale market should you decide to sell the property in the future.

Top 10 Spanish Airbnb Markets to Invest in

1. Canary Islands

The Canary Islands, a breathtaking archipelago off the northwest coast of Africa, are where natural beauty meets year-round sunshine, creating a paradise for visitors and residents alike.

From the dramatic volcanic landscapes of Tenerife to the golden dunes of Gran Canaria, the islands offer an unmatched blend of adventure and relaxation. With over 13 million tourists visiting annually, the Canary Islands are a magnet for sunseekers and outdoor enthusiasts.

The Canary Islands are a premier Airbnb market, boasting high occupancy rates and a consistent stream of visitors through most of the year. Regulations are relatively lenient, requiring hosts to register their properties and adhere to basic safety standards, making it easier to enter this thriving market. While revenue growth is steady, investors should note the seasonal peaks that coincide with the influx of European winter travelers

Earning potential for a property in the Canary Islands:

• Average daily rate: $77

• Occupancy rate: 78%

• Yoy Revenue change: 18.96%

• Average Revenue:$21K /annum

• Best month: January

2. Madrid

Madrid, Spain's vibrant capital, is a city where tradition meets modernity, creating a magnetic pull for visitors worldwide. Whether it's the royal grandeur of the Palacio Real or the lively buzz of Gran Vía, Madrid offers something for everyone. With a population of around 3.3 million, the city is always alive and draws over 10 million tourists each year.

Madrid is a top-tier Airbnb market with a strong score of 99, driven by high rental demand and lenient local regulations. Hosts must register their properties and meet specific safety standards, with new licenses restricted, especially in central areas, to balance tourism with local life. While investors should watch for moderate revenue growth and seasonal changes, Madrid's regulation makes it a dependable and welcoming choice for short-term rentals. Whether in the city center or neighborhoods like Malasaña, opportunities for success are plentiful.

Earning potential for a property in Madrid:

• Average daily rate: $93

• Occupancy rate: 83%

• Best month: October

• Yoy Revenue change: 1.61%

• Average Revenue:$26K /annum

3. Barcelona

Barcelona, the jewel of Spain's tourism crown, is a prime location for Airbnb investors. As the beating heart of Catalonia, it offers a rich mix of culture and attractions, from Gaudí's iconic architecture to the beaches of Barceloneta. With over 12 million tourists annually, Barcelona is a top-tier destination, ensuring high demand for short-term rental properties and consistent rental earnings. Its diverse neighborhoods and vibrant atmosphere make it a standout choice for tourist rentals.

Barcelona is a growing Airbnb market with a market score of 98, fueled by high rental demand, although revenue growth is moderate. The city's Airbnb regulations are strict, carefully balancing the preservation of its charm with profitable investments.

Keep in mind that short-term rentals are to be banned completely by 2029, so current hosts should consider transitioning from short-term lets back to mid or long-term rentals or exploring other accommodation markets with stable rules and regulations.

Earning potential for a property in Barcelona

• Average daily rate: $132

• Occupancy rate: 86%

• Best month: August

• Yoy Revenue change: -9%

• Average Revenue:$39K /annum

4. Majorca

Majorca, the largest of Spain’s Balearic Islands, is a Mediterranean gem where stunning beaches meet historic charm. From the lively streets of Palma, with its iconic Gothic cathedral, to the serene coves and turquoise waters of the coastline, Majorca offers a diverse array of experiences for visitors.

The island's regulations are stricter than some, requiring hosts to register their properties and comply with local licensing rules, particularly in multi-family buildings. However, these regulations help maintain the island's balance of tourism and residential life. Investors can capitalize on the summer peak season when Majorca draws in crowds from across Europe.

Earning potential for a property in Majorca

• Average daily rate: $186

• Occupancy rate: 76%

• Best month: August

• Yoy Revenue change: 13.65%

• Average Revenue:$48K /annum

5. Valencia

Valencia, where old-world charm meets futuristic innovation, offers a unique blend of experiences for visitors and residents alike. Known for its avant-garde City of Arts and Sciences and the vibrant old town, Valencia is a city that pulses with energy. With a population of about 800,000 and drawing over 2 million tourists annually, it's a city on the rise.

Valencia shines in the Airbnb market with a market score of 98 and strong rental demand. While offering excellent potential, investors should navigate local regulations, seasonal fluctuations and moderate rental earnings growth.

While the short-term rental market is thriving, offering great investment potential, investors must navigate strict regulations, including a property license online mandatory registration, safety standards and specific restrictions in residential areas and tourist establishments, like minimum stay requirements during peak seasons. Valencia's vibrant neighborhoods attract many guests and investors need to stay informed and compliant to avoid significant fines.

Earning potential for a property in Majorca

• Average daily rate: $93

• Occupancy rate: 80%

• Best month: August

• Yoy Revenue change: 1.66%

• Average Revenue:$26K /annum

6. Málaga

Málaga, the gateway to the Costa del Sol, seamlessly blends beach life with cultural heritage. Renowned for its year-round sunshine, stunning beaches, and vibrant arts scene, it attracts visitors seeking the best of both worlds. With a population of approximately 580,000 and drawing over 4 million tourists each year, this city is a magnet for sun-seekers and culture lovers alike.

Málaga's Airbnb market thrives with a perfect score of 100, fueled by strong rental demand and revenue growth. Its historic charm and beachside appeal ensure consistent tourist interest, making it ideal for short-term rentals.

However, investors need to navigate regulations, including mandatory registration of tourist rentals with the Andalusian Tourism Registry and obtaining a full tourist license here. Adhering to these rules is important, as non-compliance can lead to significant fines. Managing these requirements and seasonality effectively will help maximize returns in this flourishing market.

Earning potential for a property in Málaga

• Average daily rate: $98

• Occupancy rate: 85%

• Yoy Revenue change: 9.6%

• Average Revenue:$26K /annum

• Best month: August

7. Marbella

Marbella, nestled in Spain’s glamorous Costa del Sol, is a haven where luxury and leisure converge. Known for its upscale resorts, pristine beaches and vibrant nightlife, Marbella attracts a sophisticated international crowd year-round. Whether strolling through the charming streets of the Old Town or enjoying the yacht-studded marina of Puerto Banús, visitors are captivated by Marbella's blend of charm and opulence. With millions of tourists annually, it remains a premier destination for travelers seeking sun, style and relaxation.

Marbella is an Airbnb market powerhouse, boasting high rental demand and strong seasonal returns. With relatively straightforward regulations, hosts must register their properties with the Andalusian Tourism Registry and meet basic safety standards, making compliance manageable for investors. The market thrives on the luxury segment, offering opportunities in beachfront villas, modern penthouses and traditional Andalusian homes. While peak summer months bring the highest returns, Marbella’s year-round appeal ensures steady occupancy, making it a standout choice for Airbnb investment.

Earning potential for a property in Marbella

• Average daily rate: $170

• Occupancy rate: 65%

• Best month: August

• Yoy Revenue change: 10.72%

• Average Revenue:$39K /annum

8. Alicante

Alicante, with its golden beaches, historic sites and vibrant nightlife, stands out as a gem of the Costa Blanca. Known for its sunny climate and welcoming atmosphere, Alicante attracts both domestic and international travelers, drawing over 1.5 million tourists annually. The city, home to around 330,000 residents, offers a perfect blend of relaxation and activity.

Despite Alicante's Airbnb market performing moderately with a Market Score of 50, driven by a rental demand score of 53 and moderate revenue growth of 46, it remains a strong investment option due to its consistent tourist appeal and strategic Mediterranean location. However, investors need to be mindful of seasonality and moderately stringent regulations. These regulations include mandatory registration with municipal authorities and local authorities here, the Valencian Community Tourism Registry and adherence to specific guest and safety rules. Non-compliance with local rules can result in fines, making it crucial for investors to navigate the market carefully and adhere to local laws to succeed.

Whether you're considering a beachfront condo or a historic property in the old town, Alicante's enduring popularity makes it an excellent choice for property owners and investors in the Airbnb market.

Earning potential for a property in Alicante

• Average daily rate: $83

• Occupancy rate: 75%

• Best month: August

• Yoy Revenue change: 4.46%

• Average Revenue:$21K /annum

Pro Tip : Top areas in Alicante for Airbnb investment include Alicante Old Town, Santa Bárbara Castle, Explanada de España, Playa del Postiguet and San Juan Beach.

9. Granada

Granada, nestled in the Sierra Nevada mountains, is where history truly comes alive. The city, home to the iconic Alhambra, attracts millions each year who are captivated by its blend of old-world charm and lively neighborhoods. With a population of around 230,000 and welcoming over 2.7 million tourists annually, Granada may be small, but it leaves a big impression with its stunning vistas and rich cultural heritage.

Granada is an attractive market for Airbnb investors, boasting a high market score of 99, with strong rental demand and seasonal appeal. The city's rich history, vibrant student life and proximity to skiing make it a top destination, keeping properties in demand. Whether you're looking at a charming Albaicín apartment or a modern flat near the university, Granada's cultural and natural beauty enhances its appeal.

However, investors must navigate strict regulations, including property registration certificate tax obligations, registration, safety standards and restrictions on renting entire homes tourist apartments in certain areas. Staying compliant is crucial to ensure compliance, avoid fines and ensure success in this thriving market.

Earning potential for a property in Granada

• Average daily rate: $80

• Occupancy rate: 68%

• Best month: September

• Yoy Revenue change: 0.53%

• Average Revenue:$18K /annum

10. Córdoba

Córdoba, known for the iconic Mezquita, blends rich history with modern attractions. With the tourism and sports council’s support, the city draws over 1 million visitors annually. Home to 325,000 residents, Córdoba's mix of heritage and contemporary charm makes it a top tourist destination.

Córdoba's Airbnb market scores 84, supported by moderate rental accommodation demand and revenue growth. Investors must adhere to mandatory property registration with the Andalusian Tourism Registry and meet safety standards. Local governments enforce zoning restrictions and regulations that may limit short-term rentals, with non-compliance risking fines.

Staying updated on local regulations is key to maximizing returns in this culturally rich destination.

Earning potential for property in Córdoba

• Average daily rate: $90

• Occupancy rate: 61%

• Best month: May

• Yoy Revenue change:4.95%

• Average Revenue:$19K /annum

Why Spain is a Great Choice for Airbnb Investments

Spain offers a perfect mix of culture, beauty and solid financial opportunities, making it a top pick for Airbnb investors. Whether you're captivated by the vibrant energy of Barcelona or the serene charm of Málaga, Spain has a spot that fits every investor's dream. The country's diverse locations let you choose between bustling city life or a peaceful getaway, depending on what you're looking for.

To make things even easier, tools like Hostaway can help you manage your properties effortlessly, so you can focus on enjoying the rewards of your investment. With its endless appeal to tourists and a variety of opportunities to rent out your space, Spain is the ideal place to dive into the Airbnb market and watch the income from your investment grow.