Is buy-to-let still profitable after the 2024 rent caps?

Yes — the 2024 cap on annual rent increases (2.0–2.4%) tracks inflation closely and barely affects long-term returns. The biggest profitability driver is whether your tenant pays reliably, which is solved with rent-guarantee insurance and proper vetting.

Can I evict a non-paying tenant?

Yes, but slowly. In Alicante province, eviction averages 5–9 months from missed payment to vacant possession. Rent-guarantee insurance (4–5% of annual rent) pays out the missing rent until eviction completes.

How much can I deduct from rental income?

If you're EU/EEA-resident: all reasonable property expenses (mortgage interest, repairs, agent fees, insurance, community fees, IBI, depreciation at 3% of building value). If non-EU (UK, US, etc.): you pay 24% on gross rent with no deductions — making personal-name ownership materially more expensive.

Should I furnish the apartment?

Mid-market: yes, basic furniture pack (~€4,000) lets you charge €50–€100/month more and access the international-tenant market. Premium: no, executives prefer to bring their own. Student lets: yes, fully furnished is mandatory.

What about tenant turnover costs?

Budget €1,200–€2,000 per turnover: deep clean (€200), repaint (€500), agency fee (€700 on first year), minor repairs (€200–€400). One turnover every 3 years on a €900 rent is around 4% of gross — already baked into the cashflow above as repairs reserve + 10% management.

Property

Buy-to-Let Investment on the Costa Blanca

Long-term residential rentals are the most predictable property investment in Spain — protected by national rental law (LAU), low vacancy in coastal cities, and 4–6% gross yields. Here's exactly how the numbers work in 2026, and where to put the money.

Last updated 1 June 2026

Why buy-to-let, not holiday-let

Holiday-let returns are flashier on paper, but for most investors the long-term residential strategy is the better risk-adjusted choice. You're regulated by the LAU (Ley de Arrendamientos Urbanos), not the constantly-changing tourist-licence regime. You have one tenant for years, not 50 turnovers. You don't need a tourist licence. And you can buy in communities of owners that block short-term lets — which now includes a growing share of every desirable urbanisation in the region.

The trade-off is yield. A €200k apartment in Alicante city rents long-term for €850/month (5.1% gross); the same apartment as a tourist let could generate €1,400/month equivalent (8.4% gross) but with vastly more management and vacancy risk.

Best Costa Blanca towns for buy-to-let

Town	Tenant pool	Avg 2-bed rent	Avg buy price	Gross yield
Alicante city	Year-round residents, students, professionals	€850–€1,100	€200k–€260k	5.0–5.4%
El Campello	Commuter families, retirees	€800–€1,050	€185k–€240k	5.0–5.6%
San Vicente del Raspeig	University students, staff	€700–€900	€140k–€190k	5.5–6.5%
Torrevieja	Mixed local + Northern European retirees	€650–€900	€140k–€200k	5.4–6.1%
Elche	Year-round working families	€600–€850	€130k–€180k	5.5–6.3%
Villajoyosa	Local families, commuters to Benidorm	€700–€950	€170k–€230k	5.0–5.8%

The LAU rules every landlord must know

✦Minimum tenancy: 5 years if landlord is an individual, 7 years if a company. Tenant can leave with 30 days' notice after the first 6 months.
✦Rent increases capped: linked to the IRAV (a state-published rental index), currently 2.0–2.4% per year.
✦Deposit: one month for unfurnished, two months for furnished. Held in a regional government account.
✦Tenants of 5+ years have automatic renewal rights unless landlord needs the home for themselves.
✦Major works during a tenancy: written tenant consent required; rent can be reduced proportionally during disruption.
✦Eviction for non-payment: ~5–9 months in coastal Alicante; rent insurance is strongly recommended.

Rent-insurance is non-optional

Spanish eviction times are long. A rent-guarantee policy from Adeslas, Mussap or Mapfre costs 4–5% of annual rent and pays out non-paid rent until eviction completes. For €40/month on an €850 rental, it removes the single biggest buy-to-let risk in Spain.

Cashflow analysis — €200k Alicante apartment

The headline gross 5.0% drops to 2.2% net after taxes and all costs. That's typical for a non-EU non-resident under current rules. Move into Spanish residency (EU/EEA rate 19% on net income, with deductions) and the same property yields around 3.5% net. Move into an SL structure (limited company): around 4.0% net.

Item	Monthly	Annual
Gross rent	€900	€10,800
Community fees	−€85	−€1,020
IBI (council tax)	−€50	−€600
Buildings insurance	−€30	−€360
Letting agent (10%)	−€90	−€1,080
Rent-guarantee insurance	−€38	−€450
Repairs reserve	−€60	−€720
Net before tax	€547	€6,570
Spanish non-res tax (24%)	−€131	−€1,577
Net to owner	€416	€4,993
Yield on €226k all-in	—	2.2% net

Tenant-finding playbook

The two biggest portals in Alicante province are Idealista and Fotocasa. Spanish tenants check both daily. Photos drive enquiries — pay for a professional 60-photo set (€80–€150) and your enquiry rate will triple. List with 1–2 local agents on multi-listing (no exclusivity) for the first month; expect a 6–10% fee on first year's rent.

Vet thoroughly: payslips for last 3 months, work contract, previous landlord reference, simple income-multiple check (rent shouldn't exceed 35% of net monthly income). Skip this and you build the very risk that rent-guarantee policies refuse to cover.

Property investment overview

The full hub guide.

Vacation rentals

Holiday-let alternative compared.

Tenant law (LAU)

The legal framework for Spanish rentals.

Mortgages for non-residents

Financing your buy-to-let purchase.

Taxes for investors

Modelo 210, SL companies and Beckham Law.

Long-term rentals

Tenant-side perspective on the same market.