"Rental yield" is one of the easiest numbers to quote and one of the hardest to trust. On the Costa del Sol, gross yield headlines of 5%, 6%, even 7% are common in seller-side marketing. The number is not invented — but it is incomplete. What matters to a buyer is the net yield, after the real cost stack of owning, running and renting the property.
Gross yield is marketing math
Gross yield is a simple ratio: annual rental income divided by the purchase price. A €500,000 apartment that achieves €30,000 of gross rent per year has a 6% gross yield. That headline number ignores:
- Acquisition costs (which raise the denominator by roughly 10–13% in Spain)
- Annual running costs (community, IBI, insurance, utilities in vacancy)
- Maintenance, refresh and CapEx
- Management fees
- Vacancy
- Tax on the income itself
None of these are optional. They are part of owning. Pricing a property on gross yield is pricing it as if these costs do not exist.
The real cost stack
Here is the cost stack that the net-yield calculation has to subtract. Numbers are illustrative for a typical mid-market Marbella apartment — your specific property will differ.
- Community fees — €4,500 to €12,000 a year for an apartment in a typical Marbella urbanisation, more for premium gated complexes with full services.
- IBI — annual municipal property tax. For a €500,000 apartment, often in the €700 to €1,800 range, depending on the cadastral value and the ayuntamiento.
- Basura — rubbish collection tax, often €150 to €300 a year, separately invoiced.
- Building & contents insurance — typically €300 to €700 a year for an apartment, more for villas.
- Maintenance & refresh — a sensible reserve is 0.8–1.2% of property value per year on average, smoothed across light maintenance and occasional refresh work.
- Utilities during vacancy — standing charges for water, electricity and gas continue when the property is empty.
- Management — long-term rental management is typically one month's rent per year (~8% of gross). Tourist rental management is closer to 20–25% of gross.
- Vacancy — even a strong long-term let assumes a few weeks of vacancy across multi-year ownership. Tourist rental assumes a much higher vacancy share depending on season and location.
- Tax on rental income — non-resident EU/EEA owners are typically taxed at 19% on net rental income; non-EU non-residents at 24% on gross (no deductions). Resident owners pay personal income tax at progressive rates.
As a first-cut rule of thumb on a typical Costa del Sol long-term let, expect the net yield to be roughly 50–65% of the gross yield headline once all of the above are applied. A 6% gross often lands at 3.2–3.8% net.
Tourist rental vs. long-term let
The choice between tourist (short-term) and long-term rental is not a small one. The two products have completely different cost stacks and risk profiles.
Long-term let
- Lower gross income, lower cost intensity
- Lower management fees (~8%)
- Lower wear and refresh costs
- Lower vacancy, higher tenant-rights exposure
- Slower to pivot
Tourist rental
- Higher gross income in season, much lower out of season
- Higher management fees (~20–25%)
- Higher cleaning, linen and minor-damage costs
- Higher wear and faster refresh cycle
- Requires a Vivienda Turística licence in Andalucía — not automatic, sometimes prohibited by community statutes
On well-located coastal properties, tourist rental usually produces a higher net yield than long-term — but only when the licence is available, the management is honest about season seasonality and the property is genuinely suited to the short-term product. On the wrong property in the wrong sub-zone, tourist rental is simply a more expensive way to earn a lower number.
When a 6% gross becomes a 3% net
A worked, illustrative example for a €500,000 two-bed apartment in Marbella, let long-term at €2,500 a month:
- Gross annual rent: €30,000 (6.0% gross of purchase price)
- Community fees: €6,000
- IBI + basura: €1,400
- Insurance: €450
- Maintenance reserve: €4,500
- Management (8% of gross): €2,400
- Vacancy (3% allowance): €900
- Net before tax: €14,350 (2.9% on purchase price, or 2.6% on purchase price plus acquisition costs)
- Net after 19% non-resident tax: €11,624 (~2.3% on purchase + acquisition costs)
Numbers shown are illustrative. The point is the gap, not the precision: a 6.0% gross yield translates into a ~2.3% post-tax net yield in this scenario.
The honest net yield range
Across mid-market Marbella, Estepona and Benahavís — for a buyer focused on yield rather than view trophy — honest net yield ranges are typically:
- Well-located long-term apartment: 2.5–3.8% net after costs and tax
- Well-located tourist rental apartment with proper licence: 3.0–4.8% net after costs and tax
- Luxury villa, mainly own-use with occasional letting: typically under 2% net, sometimes negative net
These ranges are not the maximum. They are the range a calm investor should price from. Above them, the property is doing something exceptional and the assumptions should be examined. Below them, the property is being sold on something other than yield — view, location, family use, future appreciation — and the buyer should know they are paying for that, not for return.
What this means for the offer
If a property is being marketed on yield, the right buyer-side response is to:
- Re-derive gross yield from the actual achieved rents in the same complex, not a marketing assumption.
- Apply the full cost stack above to obtain the net yield.
- Compare the result to the honest net yield range for the sub-zone.
- Use the gap to inform the offer range and walk-away point.
That is how a yield argument becomes a buyer-side argument — and it is how a number that looked attractive in a listing becomes a number you can defend in writing.
