Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of Madrid's property market is included in our pack
If you're thinking about buying an apartment in Madrid to rent it out, you're probably wondering what kind of return you can actually expect.
This guide breaks down everything you need to know about rental yields in Madrid, from gross and net numbers to which neighborhoods and apartment types perform best.
We constantly update this blog post with the latest data and market changes to keep it as accurate as possible.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Madrid.
What rental yields can I realistically get from an apartment in Madrid?
What's the average gross rental yield for apartments in Madrid as of 2026?
As of early 2026, the average gross rental yield for apartments in Madrid sits at around 4.7%, which is calculated by dividing the annual rent by the purchase price.
However, that citywide average hides a wide range, and most apartment investments in Madrid fall somewhere between 3.3% and 7.1% gross yield depending on the district you choose.
The biggest factor driving this variation in Madrid is the dramatic price gap between central prime districts like Salamanca (where high purchase prices compress yields to around 3.3%) and working-class southern districts like Puente de Vallecas or Villaverde (where lower entry costs push yields above 7%).
Compared to other major Spanish cities, Madrid's average gross yield is slightly lower than cities like Valencia or Seville, mainly because Madrid's property prices have risen faster than rents in recent years, though demand remains exceptionally strong.
What's the average net rental yield for apartments in Madrid as of 2026?
As of early 2026, the average net rental yield for apartments in Madrid (before your personal income tax) typically falls between 3.2% and 3.8%, which is noticeably lower than the gross figure once you account for all ownership costs.
Most apartment investors in Madrid can realistically expect net yields in the range of 3% to 4% in central and mid-tier districts, while outer districts with lower purchase prices can reach 4.2% to 5.4% net if costs are kept under control.
The single biggest expense category eating into your gross yield in Madrid is community fees (known as "gastos de comunidad"), which average around 100 to 120 euros per month and can climb significantly higher in buildings with a concierge, pool, or elevator maintenance needs.
By the way, you will find much more detailed data in our property pack covering the real estate market in Madrid.
What's the typical rent-to-price ratio for apartments in Madrid in 2026?
As of early 2026, the typical rent-to-price ratio for apartments in Madrid is around 4.7% per year, which translates to roughly 0.39% per month (meaning you'd collect about 0.39% of your apartment's value in monthly rent).
Most apartment transactions in Madrid show rent-to-price ratios ranging from about 3.3% in expensive areas to over 7% in more affordable districts, so where you buy matters enormously.
The highest rent-to-price ratios in Madrid are found in southern and southeastern districts like Puente de Vallecas, Villaverde, Usera, and Carabanchel, where purchase prices remain relatively low but rental demand from working professionals and families keeps rents solid.
How much rent can I charge for an apartment in Madrid?
What's the typical tenant budget range for apartments in Madrid right now?
In early 2026, the typical tenant budget for renting an apartment in Madrid ranges from about 900 euros to 2,800 euros per month (roughly 950 to 2,950 USD), depending on the size and location.
Tenants looking for mid-range apartments in Madrid, such as a decent 2-bedroom in a well-connected district, typically budget between 1,300 and 1,900 euros per month (around 1,370 to 2,000 USD).
For high-end or luxury apartments in prime neighborhoods like Salamanca, Chamberí, or Retiro, tenant budgets often start at 1,900 euros and can exceed 3,500 euros per month (about 2,000 to 3,700 USD) for larger units with premium finishes.
We have a blog article where we update the latest data about rents in Madrid here.
What's the average monthly rent for a 1-bed apartment in Madrid as of 2026?
As of early 2026, the average monthly rent for a 1-bedroom apartment in Madrid is approximately 1,000 to 1,250 euros (around 1,050 to 1,320 USD), based on typical unit sizes of 45 to 55 square meters at citywide average rents.
For an entry-level 1-bedroom in Madrid, expect to pay around 850 to 1,000 euros per month (roughly 900 to 1,050 USD) for an older apartment in districts like Carabanchel, Usera, or Puente de Vallecas, often in buildings without elevator or with basic finishes.
A mid-range 1-bedroom in Madrid, meaning a well-maintained unit near metro in districts like Tetuán, Moncloa, or Chamartín, typically rents for 1,100 to 1,400 euros per month (about 1,160 to 1,470 USD) with features like natural light and air conditioning.
High-end 1-bedroom apartments in Madrid's prime zones like Salamanca, Chamberí, or the best parts of Centro can command 1,500 to 2,000 euros per month (around 1,580 to 2,100 USD), usually featuring modern kitchens, exterior orientation, and concierge buildings.
What's the average monthly rent for a 2-bed apartment in Madrid as of 2026?
As of early 2026, the average monthly rent for a 2-bedroom apartment in Madrid is approximately 1,600 to 1,950 euros (around 1,680 to 2,050 USD), based on typical unit sizes of 70 to 85 square meters.
Entry-level 2-bedroom apartments in Madrid rent for around 1,200 to 1,500 euros per month (roughly 1,260 to 1,580 USD), typically found in southern districts like Villaverde or Puente de Vallecas, often in older buildings with functional but dated interiors.
A mid-range 2-bedroom in Madrid, such as a renovated apartment in districts like San Blas-Canillejas, Ciudad Lineal, or Arganzuela with good metro access, typically costs 1,500 to 1,900 euros per month (about 1,580 to 2,000 USD).
Luxury 2-bedroom apartments in Madrid's most desirable neighborhoods like Salamanca, Chamberí, or Retiro can reach 2,200 to 3,000 euros per month (around 2,320 to 3,160 USD), featuring high ceilings, designer finishes, and premium building amenities.
What's the average monthly rent for a 3-bed apartment in Madrid as of 2026?
As of early 2026, the average monthly rent for a 3-bedroom apartment in Madrid is approximately 2,150 to 2,500 euros (around 2,260 to 2,630 USD), based on typical unit sizes of 95 to 110 square meters.
Entry-level 3-bedroom apartments in Madrid rent for around 1,700 to 2,100 euros per month (roughly 1,790 to 2,210 USD), typically located in outer districts like Carabanchel or Moratalaz, often in buildings from the 1970s or 1980s with basic common areas.
A mid-range 3-bedroom in Madrid, such as a family-sized apartment in Hortaleza, Fuencarral, or parts of Chamartín with good schools nearby, typically costs 2,200 to 2,700 euros per month (about 2,320 to 2,840 USD).
Luxury 3-bedroom apartments in Madrid's premium areas like Salamanca, Chamberí, or El Viso can command 3,000 to 4,500 euros per month (around 3,160 to 4,740 USD), usually offering spacious layouts, terraces, parking, and high-end building services.
How fast do well-priced apartments get rented in Madrid?
In Madrid, a well-priced apartment typically gets rented within 1 to 3 weeks if it's clean, correctly priced, and located near a metro or Cercanías station.
The vacancy rate for apartments in Madrid remains relatively low due to strong rental demand, with most landlords experiencing less than one month of vacancy between tenants if they price competitively.
The main factors that cause some apartments to rent faster than others in Madrid are metro proximity (tenants heavily prioritize commute certainty), the presence of air conditioning (Madrid summers are intense), and exterior orientation with good natural light (dark interior apartments sit on the market much longer).
And if you want to know what should be the right price, check our latest update on how much an apartment should cost in Madrid.
Which apartment type gives the best yield in Madrid?
Which is better for yield between studios, 1-bed, 2-bed and 3-bed apartments in Madrid as of 2026?
As of early 2026, studios and 1-bedroom apartments typically offer the best rental yield in Madrid because they command the highest rent per square meter while having the broadest pool of potential tenants.
In terms of typical gross yields by apartment type in Madrid: studios and 1-beds often achieve 5% to 6% gross in outer districts (4% to 4.5% in central areas), 2-beds tend to fall slightly lower at 4.5% to 5.5% gross, while 3-beds usually deliver the weakest yields at 4% to 5% because their higher purchase prices are not proportionally offset by higher rents.
The main reason smaller units outperform in Madrid is the city's strong inflow of young professionals, students, and international workers who need affordable solo housing near jobs and universities, creating constant demand that keeps vacancy low and rent per square meter high.
Which features are best if you want a good yield for your apartment in Madrid?
The top features that boost rental yield for apartments in Madrid are not luxury finishes but practical livability factors: walking distance to metro (Madrid tenants pay a premium for commute certainty), air conditioning (non-negotiable for summer), good natural light from exterior orientation, an elevator if the apartment is above the second floor, and an efficient layout that avoids wasted corridor space.
In Madrid, middle floors (3rd to 5th) in buildings with elevators are generally easiest to rent because they offer a balance of natural light, reduced street noise, and convenient access, while ground floors and top floors often face challenges (security concerns or heat, respectively).
Apartments with balconies or terraces in Madrid do command higher rents, especially post-pandemic, as tenants increasingly value outdoor space, though the rent premium often does not fully offset the higher purchase price of these units.
Building features like elevators and parking in Madrid can justify higher service charges and rents, but concierge services are mostly valued in prime areas like Salamanca or Chamberí and may not add enough rent in working-class districts to offset the higher community fees.
Which neighborhoods give the best rental demand for apartments in Madrid?
Which neighborhoods have the highest rental demand for apartments in Madrid as of 2026?
As of early 2026, the neighborhoods with the highest rental demand for apartments in Madrid include Centro (especially Malasaña, Lavapiés, and Sol), Chamberí (Trafalgar, Almagro, Ríos Rosas), Salamanca (Goya, Lista, Recoletos), Chamartín (Prosperidad, Castilla), Moncloa-Aravaca (Argüelles, Ciudad Universitaria), and Tetuán (Cuatro Caminos).
The main demand driver in these Madrid neighborhoods is the combination of excellent metro connectivity, proximity to major employment hubs (financial district in Azca, government offices, hospitals, universities), and vibrant lifestyle amenities that attract both Spanish and international tenants.
In these high-demand Madrid neighborhoods, well-priced apartments typically rent within 1 to 2 weeks, and vacancy rates remain among the lowest in the city because tenant demand consistently outpaces available supply.
One emerging neighborhood gaining rental momentum in Madrid is Usera, which offers affordable rents, improving metro connections, and a growing reputation as a diverse, vibrant area attracting younger tenants priced out of central districts.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Madrid.
Which neighborhoods have the highest yields for apartments in Madrid as of 2026?
As of early 2026, the neighborhoods with the highest rental yields for apartments in Madrid are concentrated in the southern and southeastern districts, including Puente de Vallecas (neighborhoods like Numancia and Entrevías), Villaverde (Los Rosales, Butarque), Usera (Moscardó, Almendrales), Carabanchel (Vista Alegre, Opañel), and San Blas-Canillejas (Canillejas, Las Rosas).
These high-yield Madrid neighborhoods typically deliver gross rental yields between 6% and 7.1%, which is significantly above the citywide average of 4.7%.
The main reason these neighborhoods offer higher yields in Madrid is that property prices have remained relatively affordable compared to central areas while rental demand stays solid due to good metro connections, local employment, and steady inflows of working-class and middle-class tenants seeking affordable housing within the city limits.
Should I do long-term rental or short-term rental in Madrid?
Is short-term rental legal for apartments in Madrid as of 2026?
As of early 2026, short-term rental is legal for apartments in Madrid, but it is heavily regulated and enforcement has been tightening, with the city actively removing non-compliant listings from platforms like Airbnb.
The main legal requirements for operating a short-term rental apartment in Madrid include obtaining a tourist accommodation license (Vivienda de Uso Turístico registration), complying with building community rules (many communities have banned tourist rentals), and meeting specific zoning requirements that vary by district.
To legally operate an Airbnb-style rental in Madrid, you must register with the regional tourism registry, display your registration number on all listings, and ensure your building's community of owners has not prohibited tourist accommodation, which is an increasingly common restriction in central neighborhoods.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Madrid.
What's the gross yield difference short-term vs long-term in Madrid in 2026?
As of early 2026, short-term rentals in Madrid can generate gross yields of 6% to 9% on paper, compared to around 4.7% for long-term rentals, but this gap narrows significantly once you account for STR-specific costs.
In Madrid, typical gross yields for short-term rentals in tourist-friendly areas range from 6% to 9% based on strong nightly rates and occupancy, while long-term rentals deliver a more predictable 4% to 5.5% gross depending on the district.
The main additional costs that reduce the net yield advantage of short-term rentals in Madrid include platform fees (Airbnb takes around 3% from hosts), professional cleaning between guests, utilities and internet (typically owner-paid), higher wear and tear, furnishing costs, and either your own time or management fees that can reach 20% to 25% of revenue.
For a short-term rental to genuinely outperform a long-term rental in Madrid after all costs, most analyses suggest you need to achieve at least 65% to 70% occupancy at competitive nightly rates, which is achievable in prime tourist areas but challenging elsewhere.
What costs will eat into my net yield for an apartment in Madrid?
What are building service charges as a % of rent in Madrid as of 2026?
As of early 2026, building service charges (community fees or "gastos de comunidad") in Madrid typically represent about 5% to 10% of your monthly rent, averaging around 100 to 130 euros per month (roughly 105 to 137 USD) for a standard apartment.
The realistic range of building service charges in Madrid varies from about 60 euros per month (63 USD) for a basic building with minimal services to over 200 euros per month (210 USD) for buildings with a concierge, pool, gym, or extensive common areas.
In Madrid specifically, the services that justify higher-than-average community fees include a live-in or daytime concierge ("portero"), communal swimming pool (common in newer developments), elevator maintenance in older buildings with frequent repairs, and private gardens or sports facilities.
What annual maintenance budget should I assume for an apartment in Madrid right now?
A realistic annual maintenance budget for a rental apartment in Madrid is around 800 to 1,800 euros per year (roughly 840 to 1,900 USD), covering minor repairs, repainting between tenants, and appliance fixes.
The range of annual maintenance costs in Madrid depends heavily on apartment age: newer buildings (post-2000) typically need 600 to 1,000 euros yearly (630 to 1,050 USD), while older buildings from the 1960s to 1980s can require 1,200 to 2,000 euros (1,260 to 2,100 USD) due to aging plumbing, electrical systems, and elevator issues.
The most common maintenance expenses apartment owners face in Madrid are boiler and water heater repairs (central heating systems in older buildings are particularly problematic), air conditioning servicing (essential given Madrid's summer heat), and periodic "derramas" (special assessments for building-wide repairs like facade work or elevator replacement).
What property taxes should I expect for an apartment in Madrid as of 2026?
As of early 2026, the main property tax for apartments in Madrid is the IBI (Impuesto sobre Bienes Inmuebles), and most apartment owners pay between 300 and 900 euros per year (roughly 315 to 950 USD), though this varies significantly based on your property's cadastral value.
The range of property taxes in Madrid depends on your apartment's cadastral value (not market value) and location: a small apartment in a working-class district might pay around 250 to 400 euros yearly (265 to 420 USD), while a large apartment in a prime area could pay 800 to 1,500 euros (840 to 1,580 USD).
Property tax in Madrid is calculated by applying the city's IBI rate of 0.414% (reduced for 2026) to your property's cadastral value, which is typically 40% to 60% of the market value and is reassessed periodically by the regional cadastre office.
Madrid does offer some IBI reductions, including discounts for large families, properties with solar installations, and certain historic buildings, though these exemptions have specific eligibility requirements and application processes.
If you want to go into more details, we also have a blog article detailing all the property taxes and fees in Madrid.
How much does landlord insurance cost for an apartment in Madrid in 2026?
As of early 2026, typical annual landlord insurance for an apartment in Madrid costs around 200 to 450 euros per year (roughly 210 to 475 USD), depending on coverage level, apartment value, and whether you include rent default protection.
The range of landlord insurance costs in Madrid varies from about 150 euros yearly (160 USD) for basic coverage on a small apartment to 500 euros or more (525 USD) for comprehensive policies that include rent guarantee insurance, higher liability limits, and coverage for furnished properties.
What's the typical property management fee for apartments in Madrid as of 2026?
As of early 2026, the typical property management fee for long-term rental apartments in Madrid is around 5% to 10% of monthly rent (plus VAT in many cases), which translates to roughly 75 to 190 euros per month (about 80 to 200 USD) for an average apartment.
The range of property management fees in Madrid varies from about 5% for basic rent collection and tenant communication to 10% or more for full-service management that includes tenant sourcing, legal compliance, maintenance coordination, and regular property inspections.
Standard property management services in Madrid typically include advertising the property, screening and selecting tenants, preparing rental contracts, collecting rent, coordinating repairs, and handling tenant communications, though tenant-finding fees are often charged separately (usually equivalent to one month's rent).
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Madrid, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Idealista Rent Index | Spain's largest property portal with consistent methodology | We used the rent per square meter data by district to calculate gross yields. We then converted these into typical monthly rents by apartment size. |
| Idealista Sale Price Index | Widely cited market benchmark for asking prices in Spain | We used the sale price per square meter data by district for yield calculations. We paired it with rent data to compute gross yields and rent-to-price ratios. |
| Idealista Homeowner Cost Report | Compiles owner-cost benchmarks citing Spanish institutions | We used it to anchor recurring costs like community fees, IBI, and insurance. We translated those costs into realistic net yield haircuts for Madrid. |
| Madrid City Council IBI Announcement | Official city government publishing actual tax parameters | We used the 0.414% IBI rate to model annual property tax costs. We then estimated effective tax amounts using typical cadastral-to-market value ratios. |
| Fotocasa Research Time-to-Rent Survey | Major Spanish portal with media-referenced research surveys | We used it to estimate how fast well-priced rentals get taken. We interpreted results as a practical leasing-speed benchmark for Madrid. |
| Madrid Tax Agency 2026 Ordinances | Official tax agency portal for Madrid municipality | We used it to verify 2026 local tax changes are in force. We reflected those charges in our net yield estimates. |
| AirDNA Madrid Market Data | Most widely used professional dataset for Airbnb analytics | We used it to estimate short-term rental gross revenue potential. We compared it to long-term rents to quantify the yield gap. |
| El País (Exceltur Data) | Top-tier national newspaper citing Exceltur's dataset | We used it to frame regulatory enforcement and supply changes in tourist rentals. We reflected higher regulatory risk in STR yield estimates. |
| Cinco Días | Leading financial newspaper distinguishing gross vs net returns | We used it to validate that net yields are meaningfully lower than gross yields. We tailored the net haircut to Madrid's local taxes and fees. |
| Madrid Municipal Population Statistics | Official city population registry statistics | We used it to understand where rental demand structurally concentrates. We combined it with rent and price data to identify high-demand areas. |