Buying Property as an Investment in 2025: Cities with the Highest Profitability

If you’re considering buying property as an investment in 2025, you’re probably wondering which cities are the most profitable. Rising interest rates, changes in the Housing Law, and shifts in rental demand are shaping a very different map compared to previous years. In this article, we’ll review the Spanish cities offering the highest returns this year, based on the latest data, and share key tips to help you make a well-informed decision.

Why Is It a Good Time to Analyze Profitability by City?

Real estate remains a safe haven for many investors in Spain. However, in 2025, not all cities offer the same opportunities. Property prices and rental income vary significantly depending on location, and rent control policies or new tax regulations directly impact net returns.

Before jumping into an investment, it’s important to assess:

• Average price per square meter
• Rental demand in the area
• The impact of the Housing Law in regulated (tense) areas
• Costs associated with purchasing and managing the rental

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2025 Ranking: Most Profitable Cities to Buy Property in Spain

According to updated data from major property portals and market research, these are the Spanish cities standing out in 2025 for their average gross rental yield:

Murcia

Murcia leads the ranking with a gross return of around 6.5% in 2025. The city combines still-accessible purchase prices with growing rental demand, driven by students, young professionals, and service-sector workers. Its property market remains dynamic thanks to the university and a rising tech scene in the region.

Lleida

Lleida offers an average return close to 7.7%, keeping it among the top picks for small investors. Acquisition prices remain among the lowest of any provincial capital, while rental demand is solid, coming from local residents and workers in the agri-food and service sectors. Its proximity to hubs like Barcelona adds mid-term appreciation potential.

Huelva

In 2025, Huelva shows an average return of 7.5%, thanks to a highly competitive property market and strong rental demand, particularly in the city center and coastal neighborhoods. Tourism appeal and revived industrial activity have boosted demand for affordable, medium-sized rentals.

Santa Cruz de Tenerife

The capital of Tenerife maintains an average return of 10.6%, combining residential rentals with tourist options. Its climate, connectivity, and services make rental demand steady—from residents to remote workers and digital nomads. However, investors should be mindful of local vacation rental regulations, which may restrict this use.

Castellón

Castellón posts a return of around 8.4% in 2025. The city stands out for moderate purchase prices and rising rental demand near the center and university. The city’s push for logistics and port development is attracting new tenant profiles, boosting its appeal for investors.

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Other Cities to Watch

• Valencia: Balanced purchase prices and high rental demand
• Alicante: Especially profitable in areas not saturated by tourism
• Almería: A growing market in peripheral neighborhoods

If you’d like to understand how the current economic climate affects real estate, don’t miss our article: Euribor Rise in 2025: How It Affects Your Mortgage.

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Key Tips for Successful Real Estate Investment in 2025

If you’re considering buying to rent, here are a few key recommendations:

• Study the area thoroughly: Beyond city averages, focus on the neighborhood and its future prospects. Make sure it has real rental demand and good services.
• Pay attention to the Housing Law: If you’re buying in a regulated area, rental caps may affect your returns. Check official listings (Ministry of Housing).
• Calculate net returns, not just gross: Include taxes, community fees, insurance, property tax, and possible vacancy periods. Net returns are usually 1 to 1.5 points lower than gross.
• Evaluate short-term rentals carefully: They may seem more profitable but are increasingly regulated and may not suit all investor profiles.

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Buying real estate as an investment in 2025 is still a promising option—but choosing the right city and property type matters more than ever. Cities like Murcia, Lleida, Huelva, Santa Cruz de Tenerife, and Castellón offer some of the best opportunities, but remember: doing the math and seeking proper advice is key.

At KM2 News, we’ll keep you updated so you can invest wisely and with confidence.