Return on investment for Costa Blanca holiday rentals is a key measure for international buyers assessing property opportunities. ROI determines whether a property produces sustainable income and long-term value. Buyers who measure ROI correctly understand not only the gross yield but also the impact of costs, taxes, and licensing.
Market Demand in Costa Blanca
Return on investment for Costa Blanca holiday rentals depends on consistent tourism demand. The region attracts millions of international visitors each year, supported by Alicante–Elche Miguel Hernández Airport with direct flights across Europe.
Alicante city benefits from both tourism and business travel, Benidorm maintains strong occupancy with its year-round holiday economy, and Torrevieja draws budget-conscious travellers. Premium towns like Altea, Jávea, and Moraira cater to higher-spending visitors who prefer villas with sea views. Orihuela Costa appeals to expatriates and repeat visitors. Seasonal peaks occur in July and August, but spring and autumn maintain steady bookings thanks to mild weather. See our Alicante villa guide for a closer look at local markets.
Factors That Drive Property Rental ROI in Costa Blanca
Return on investment for Costa Blanca holiday rentals rises with specific property features.
Location directly affects occupancy and nightly rates. Properties within walking distance of beaches or with sea views achieve higher returns. Access to restaurants, golf courses, and transport links further supports demand.
Property type influences yield. Benidorm apartments offer steady occupancy with lower prices, while villas in Moraira or Jávea command premium nightly rates but experience more seasonal variation.
Licensing status is decisive. A VT license is mandatory in the Valencian Community, and from July 2025, NRUA registration becomes compulsory. Licensed properties attract higher demand because guests trust verified rentals.
Quality of furnishings and modernisation also impact ROI. Well-presented properties generate better reviews and repeat bookings. Read more on checks in our property due diligence in Costa Blanca guide.
Calculating Gross Rental Yield
Return on investment for Costa Blanca holiday rentals is first measured as gross rental yield. Gross yield equals annual rental income divided by purchase price.
Example:
- Purchase price: €200,000
- Annual rental income: €12,000
- Gross yield = €12,000 ÷ €200,000 = 6%
Typical yields include:
- Benidorm apartments: 5–6% gross, supported by year-round demand.
- Torrevieja apartments: 4–5% gross, lower prices but consistent occupancy.
- Moraira or Jávea villas: 4–5% gross, higher nightly rates with fewer weeks rented.
These numbers provide a base, but net ROI depends on costs and taxes, which we explain in Spanish property taxes explained for foreign buyers.
Net Property ROI After Costs and Taxes
Return on investment for Costa Blanca holiday rentals must be measured after deducting costs.
Ongoing expenses include:
- Community fees in shared developments.
- Maintenance, cleaning, and utility costs.
- Insurance premiums.
- Property management fees, often 15–20% of rental income.
Taxes reduce ROI further. Owners pay IBI annually, plus IRNR on rental income. Non-EU residents cannot deduct expenses, while EU residents can. On sale, capital gains tax and Plusvalía municipal also apply.
Impact of Spanish Rental Regulations on ROI
Return on investment for Costa Blanca holiday rentals is shaped by legal compliance. Properties without licenses cannot be legally advertised, leading to fines and delisting from platforms.
The Horizontal Property Law requires community approval for apartments. A buyer who purchases in a building where tourist rentals are restricted cannot operate legally. The NRUA, launched in July 2025, requires all rentals to display a national registration ID. Compliance protects ROI by securing long-term access to booking platforms..
Comparing Holiday Rentals vs Long-Term Rentals
Return on investment for Costa Blanca holiday rentals can outperform long-term lets but carries more volatility.
Holiday rentals provide higher yields, especially in coastal towns with strong seasonal demand. However, they require active management, regular cleaning, and marketing.
Long-term rentals generate lower yields, often 3–4%, but income is stable year-round. Long-term lets avoid licensing requirements and are less management-intensive. Investors must balance higher holiday rental returns with the certainty of long-term occupancy.
Regional Costa Blanca Variations in ROI
Return on investment for Costa Blanca holiday rentals varies by town.
- Alicante city balances tourism and business demand, supporting both holiday lets and corporate rentals.
- Benidorm provides strong yields due to high occupancy and international brand recognition.
- Altea and Jávea offer premium returns with higher capital appreciation, though occupancy is more seasonal.
- Torrevieja delivers affordable entry points with consistent returns.
- Orihuela Costa combines expatriate demand with strong holiday bookings.
These regional differences highlight the need for localised analysis.
Strategies to Maximise Rental ROI
Return on investment for Costa Blanca holiday rentals increases with the right strategies.
- Use professional property management for guest handling and marketing.
- List on multiple booking platforms, including Airbnb, Booking.com, and direct websites.
- Renovate kitchens, bathrooms, and outdoor areas to justify higher nightly rates.
- Maintain strong guest communication to secure positive reviews and repeat stays.
Purchase structure also matters. Buyers who plan for tax efficiency and compliance from the outset achieve better long-term returns. Steps for structuring a purchase appear in our step-by-step property buying process in Spain. International property buyers who combine compliance with strong market positioning achieve yields that outperform many European regions. Villas al Sol, API nº 1197 and RAICV 0122, supports international buyers in identifying profitable properties and securing compliant rental operations.
