Salt & Stone
Hello,
Welcome to the weekly issue of Salt & Stone, your curated journal for coastal living across Spain and Portugal. Each edition brings you a life lived closer to the water - unhurried, sun-warmed, and rooted in Mediterranean and Atlantic tradition.
We journey through the Algarve's quietest coves and the Costa del Sol - where slow mornings, sea light, and good company elevate your days.
Weekly highlight
The Yield You're Shown vs. The Yield You Actually Get
Property listings on the Costa del Sol and Costa Blanca routinely advertise 8 - 10% rental yields. After acquisition costs, management fees, taxes, and the ordinary friction of running a rental, the market's real average net yield is 2.8 - 3.5%. The gap between those two numbers is where most investors get quietly misled and where a well-selected property earns its keep.
Where the Gross Number Comes From
The 8–10% figure isn't fabricated. It's a real gross yield on short-term tourist rentals, calculated before anything is deducted. What gets left out of the marketing material is everything that follows: acquisition costs of 9–14% on top of the purchase price, furnishing, platform commissions, community fees, the annual property tax (IBI), utilities, insurance, accounting, repairs, and a 19% income tax for EU/EEA tax residents.
Run all of that through the model and the "good property, operated without particular optimisation" case nets 2.8–3.5% per year - after tax, on total acquisition cost. That's the honest market average.
What Actually Moves the Needle
Two documented cases in current portfolio models sustain 4.2 - 4.3% net after tax, roughly 40% higher than the market average. Both share the same traits:
A new apartment with facilities (~€350,000): 10.5% gross on premium new-build rates, optimised operation, delivering 4.2% net
A renovated resale in Marbella East: 9.6% gross, delivering 4.3% net after including a €50,000 renovation and furnishing package in the total cost
The difference between 2.8% and 4.5%+ isn't luck. It comes from five decisions made at the point of purchase: micro-location and views, the quality of the building and its facilities (new stock with pools and modern common areas outperforms older blocks), the furnishing standard, a verified and transferable licence status, and a seasonal letting strategy - tourist rates in summer, mid-term contracts in winter - that lifts occupancy from the 50 - 60% range toward 70 - 80%.
The Caveat Worth Sitting With
Price and location don't guarantee yield. A €380,000 resale in central Estepona, well located and operated in a standard way, nets roughly 3% - barely above the market floor. That doesn't make it a bad purchase. It means the return case for that property has to come from somewhere else: appreciation, or the leverage effect of bank financing, rather than the rent itself.
The Bigger Number
Rent is only one engine. Add estimated appreciation of 6% per year - a deliberately conservative assumption, well below Málaga's actual six-year notarial average of 8.3% - and total return on capital across current models reaches 8.4 - 10.3% per year, before any financing. That's the number that matters for a buy-and-hold decision. The rental yield alone is only ever part of the story.
Looking Ahead
The lesson isn't that tourist rental yields are a myth, it's that the advertised number and the deliverable number are two different calculations, and only one of them survives contact with a tax return. Before making an offer on any income property in Southern Spain, the net-after-tax figure on total acquisition cost is the only number worth anchoring a decision to.
The Essentials
Featured properties from our sponsor PASKU.CO
INFINITE VIEW
High end collection of luxury apartments situated on the outskirt of Marbella.
Until next time,
Empowering dreams, Elevating lifestyles.
