Authored by the expert who managed and guided the team behind the Spain Property Pack
Yes, the analysis of Palma de Mallorca's property market is included in our pack
Rental yields in Palma de Mallorca in 2026 are sitting around 4.4% gross on average, which is solid for a premium coastal city but leaves real room to do better if you pick the right area and property type.
We keep this article updated regularly so the data you read here always reflects the current market, not last year's numbers.
Yields can swing from around 3.5% in the priciest parts of the Old Town all the way up to 6.7% in more affordable districts like La Soledat, so where you buy makes a very big difference.
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 Palma de Mallorca.
What are the rental yields in Palma de Mallorca as of 2026?
What's the average gross rental yield in Palma de Mallorca as of 2026?
As of early 2026, the average gross rental yield across all residential property types in Palma de Mallorca is around 4.4%.
For most standard residential properties in Palma de Mallorca in 2026, gross yields typically fall between 3.5% and 6.7% depending on location and property type.
That 4.4% average puts Palma de Mallorca slightly below cheaper inland Spanish cities but broadly in line with other high-demand coastal capitals where purchase prices have run hard in recent years.
The single biggest factor shaping gross yields in Palma de Mallorca right now is the gap between fast-rising purchase prices and rents that, while also climbing, simply can't keep up at the same pace in the most sought-after districts.
What's the average net rental yield in Palma de Mallorca as of 2026?
As of early 2026, the average net rental yield in Palma de Mallorca after deducting typical running costs is around 3.2% for a standard long-term residential rental.
The gap between gross and net in Palma de Mallorca tends to be around 1.0 to 1.5 percentage points, which is meaningful and often surprises first-time landlords who only looked at the gross figure.
The expense category that eats most into gross yield in Palma de Mallorca specifically is community fees, because the city is dominated by apartment buildings where monthly HOA-style charges for shared areas, lifts, and building upkeep add up quickly and are almost always landlord-paid.
For most investment properties in Palma de Mallorca in 2026, a realistic net yield range is roughly 2.8% to 3.8%, with the upper end achievable in higher-yield districts where purchase prices are more moderate and tenant demand stays strong.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Palma de Mallorca.
We made this infographic to show you how property prices in Spain compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What yield is considered "good" in Palma de Mallorca in 2026?
In Palma de Mallorca in 2026, a gross yield of 5% or above is generally considered good by local investors, because it meaningfully clears the city-wide average of 4.4% and signals you've found a property where rent income holds up well against the purchase price.
The threshold that separates an average-performing property from a genuinely high-performing one in Palma de Mallorca is roughly 6% gross, which is rare in prime areas but achievable in districts like Rafal-Son Forteza or Llevant-La Soledat where prices are more moderate.
How much do yields vary by neighborhood in Palma de Mallorca as of 2026?
As of early 2026, gross rental yields in Palma de Mallorca range from about 3.6% in the lowest-yield districts up to around 6.7% in the highest-yield ones, which is a spread of over 3 percentage points across the city.
The neighborhoods that typically deliver the highest yields in Palma de Mallorca are more affordable working-class or transitional districts, with areas like La Soledat, Son Gotleu, Camp Redó, and Rafal-Son Forteza leading the table in 2026.
On the other end, the lowest yields are found in the most desirable and premium parts of the city, particularly Casco Antiguo (the Old Town), Santa Catalina, Son Armadans, and El Terreno, where purchase prices are driven up by lifestyle demand and scarcity.
The main reason yields vary so much across Palma de Mallorca is that sale prices react much more strongly to prestige and lifestyle appeal than rents do, so the most "famous" neighborhoods end up with compressed yields even when rents are perfectly healthy in absolute terms.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Palma de Mallorca.
How much do yields vary by property type in Palma de Mallorca as of 2026?
As of early 2026, gross rental yields across different property types in Palma de Mallorca range from around 3% to 3.5% for luxury villas at the low end, up to around 5% to 6% for well-located small apartments and studios at the high end.
Small apartments and studios currently deliver the highest average gross rental yield in Palma de Mallorca, because rent per square meter is strongest for compact units, especially in central and walkable districts where demand from local residents and remote workers is constant.
Villas and luxury homes consistently deliver the lowest gross yields in Palma de Mallorca, because their purchase prices are heavily influenced by lifestyle and second-home demand that far outpaces what any long-term tenant would pay in rent.
By the way, you might want to read the following:
What's the typical vacancy rate in Palma de Mallorca as of 2026?
As of early 2026, the average economic vacancy rate for long-term residential rentals in Palma de Mallorca is around 4%, meaning landlords with a well-managed, well-located property can expect their unit to sit empty for roughly two to three weeks a year on average.
That said, vacancy rates in Palma de Mallorca vary quite a bit by neighborhood, ranging from as low as 2% to 3% in high-demand central districts to 5% to 8% in higher-yield, higher-friction areas where tenant turnover is more frequent.
The main factor keeping vacancy low across most of Palma de Mallorca is the city's structurally tight rental supply, which is squeezed by strong residential demand, limited new construction, and the ongoing pressure of tourist accommodation competing directly with the long-term rental stock.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Palma de Mallorca.
What's the rent-to-price ratio in Palma de Mallorca as of 2026?
As of early 2026, the average rent-to-price ratio in Palma de Mallorca is approximately 0.36% per month, or about 4.36% per year, based on average rents of around 18.60 euros per square meter per month against average sale prices of around 5,120 euros per square meter.
For buy-to-let investors in Palma de Mallorca, a monthly rent-to-price ratio above 0.42% (equivalent to a 5% annual gross yield) is generally seen as favorable, as it means the property is generating enough rental income to cover costs and leave a meaningful margin, which directly connects to why clearing 5% gross is the local benchmark for a "good" deal.
Compared to cheaper Spanish cities like Zaragoza or Murcia, Palma de Mallorca's rent-to-price ratio is noticeably lower, reflecting the city's premium coastal status where capital values have grown faster than rents, but it compares reasonably with other Mediterranean hotspots like Barcelona or the Costa del Sol.
We have made this infographic to give you a quick and clear snapshot of the property market in Spain. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which neighborhoods and micro-areas in Palma de Mallorca give the best yields as of 2026?
Where are the highest-yield areas in Palma de Mallorca as of 2026?
As of early 2026, the three highest-yielding districts in Palma de Mallorca are Llevant-La Soledat (around 6.7% gross), Son Oliva-Plaza de Toros-Camp Redó (around 6.0%), and Rafal-Son Forteza (around 5.9%).
In those top-performing areas, gross yields generally range between 5.5% and 6.7%, with specific streets and buildings in La Soledat and Camp Redó able to hit the upper end of that range when purchase prices are negotiated well.
What these high-yield areas in Palma de Mallorca share is a combination of relatively moderate purchase prices and steady tenant demand from local residents and workers who need affordable, well-located rentals in a city where central rents have become very expensive.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Palma de Mallorca.
Where are the lowest-yield areas in Palma de Mallorca as of 2026?
As of early 2026, the three lowest-yielding areas in Palma de Mallorca are Casco Antiguo (the Old Town/Ciutat Antiga, around 3.6% gross), Santa Catalina-Son Armadans-Marítim (around 3.9%), and the lifestyle-premium pockets of Portixol-El Molinar and Bonanova-Sant Agustí.
In those low-yield districts, gross yields typically sit in the 3.5% to 4.0% range, which means after costs a net yield of around 2.5% to 3.0% is a realistic outcome for most landlords.
Yields are compressed in these areas of Palma de Mallorca because purchase prices are driven up by prestige, scarcity, and lifestyle appeal (proximity to the waterfront, historic character, trendy dining scenes), and that premium on the buy side doesn't translate proportionally into higher rents from long-term tenants.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Palma de Mallorca.
Which areas have the lowest vacancy in Palma de Mallorca as of 2026?
As of early 2026, the three neighborhoods in Palma de Mallorca with the lowest residential vacancy are Santa Catalina, Las Avenidas, and the Old Town (Casco Antiguo), all of which benefit from constant, deep tenant demand.
In those low-vacancy areas, vacancy rates typically run between 2% and 3%, which in practical terms means a well-presented unit in Santa Catalina or Las Avenidas rarely sits empty for more than two or three weeks before finding a tenant.
The main demand driver keeping vacancy this low in these areas is their combination of walkability, access to amenities, and strong appeal to the working professionals, expats, and long-term residents who make up the core rental market in Palma de Mallorca.
Which areas have the most renter demand in Palma de Mallorca right now?
The three neighborhoods currently seeing the strongest renter demand in Palma de Mallorca are Santa Catalina, Las Avenidas, and the edges of the Old Town, all of which consistently attract a high volume of rental enquiries relative to available stock.
The renter profile driving most of the demand in these areas is young working professionals and remote workers, many of them Spanish nationals or European expats, who want a centrally located, well-connected apartment within walking distance of restaurants, shops, and public transport.
In Santa Catalina and Las Avenidas, well-priced rental listings in Palma de Mallorca tend to attract serious tenants within one to two weeks of going live, and units that tick the right boxes (lift, air conditioning, good natural light) often receive multiple enquiries before the first viewing.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Palma de Mallorca.
Which upcoming projects could boost rents and rental yields in Palma de Mallorca as of 2026?
As of early 2026, the most concrete development pipeline in Palma de Mallorca with the potential to lift rents is the Palma Culture and Innovation Bay project, which centers on transforming the Nou Llevant seafront area, alongside general urban improvements tied to the city's waterfront regeneration agenda.
The neighborhoods most likely to benefit from these projects are Nou Llevant and the nearby streets of Foners and Pere Garau, which sit within or adjacent to the regeneration footprint and currently offer some of the most affordable entry prices in the eastern part of Palma de Mallorca.
Once the Nou Llevant seafront improvements are more visibly underway, investors in that micro-area could realistically see rent uplifts of 5% to 10% above the market trend, as improved public realm, new amenities, and a cleaner image tend to attract a higher-income tenant profile that landlords in transitional neighborhoods can capture early.
You'll find our latest property market analysis about Palma de Mallorca here.
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What property type should I buy for renting in Palma de Mallorca as of 2026?
Between studios and larger units in Palma de Mallorca, which performs best in 2026?
As of early 2026, studios and one-bedroom apartments outperform larger units on both rental yield and occupancy in Palma de Mallorca, making them the stronger choice for most buy-to-let investors in this market.
In Palma de Mallorca in 2026, studios and compact one-beds in central districts typically achieve gross yields in the 5% to 6% range, while two-bedroom and larger apartments tend to land in the 4% to 4.5% range, and the currency figures are roughly 18,000 to 22,000 euros per year for a studio versus 22,000 to 30,000 euros for a larger flat, depending on the district.
The main reason smaller units outperform in Palma de Mallorca is that rent per square meter is consistently higher for compact properties, and because the pool of prospective tenants for a studio or one-bed is larger and more permanent, vacancy risk is lower.
That said, a two or three-bedroom apartment in a family-friendly district like Son Rapinya or La Vileta can actually be the better investment for landlords who want longer tenancies, lower turnover costs, and a more stable tenant profile, even if the headline yield is slightly lower.
What property types are in most demand in Palma de Mallorca as of 2026?
As of early 2026, one and two-bedroom apartments are by far the most in-demand property type among renters in Palma de Mallorca, reflecting both affordability constraints and the lifestyle preferences of the city's dominant renter demographic.
Ranked by current tenant demand in Palma de Mallorca, the top three property types are one and two-bed apartments in central or walkable districts, compact studios in high-footfall neighborhoods, and two or three-bed apartments with good amenities (lift, air conditioning, parking) in well-connected family zones.
The primary driver behind this demand pattern in Palma de Mallorca is the growth of the remote-worker and young-professional population, many of them relocating from the Spanish mainland or from northern Europe, who want a comfortable but manageable-sized apartment in a city that offers Mediterranean quality of life without the extremes of Barcelona or Madrid pricing.
What unit size has the best yield per m² in Palma de Mallorca as of 2026?
As of early 2026, units in the 30 to 55 square meter range (studios and compact one-beds) deliver the best gross yield per square meter in Palma de Mallorca, outperforming both smaller micro-studios and larger family apartments on this specific metric.
For that optimal size range in Palma de Mallorca, the rent per square meter typically runs between 17 and 22 euros per month, which translates to an annualised gross yield per square meter of around 200 to 260 euros, or roughly 220 to 285 US dollars and 200 to 260 euros at current exchange rates.
Larger apartments lose yield per square meter in Palma de Mallorca because the rent premium for extra bedrooms does not scale linearly with additional floor area, meaning each additional square meter beyond a comfortable compact size adds less and less to monthly rent while still adding proportionally to the purchase price.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Spain versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What costs cut my net yield in Palma de Mallorca as of 2026?
What are typical property taxes and recurring local fees in Palma de Mallorca as of 2026?
As of early 2026, landlords in Palma de Mallorca should budget roughly 400 to 1,200 euros per year for IBI (the annual property tax), with the exact amount depending on the cadastral value of the specific unit, which can vary widely across the city.
On top of IBI, Palma de Mallorca landlords must also budget for the TRSU (municipal waste treatment fee), which runs at roughly 100 to 200 euros per year per dwelling and, as a nationally rising cost item in Spain in 2026, is worth building in conservatively.
Together, IBI and TRSU typically represent around 4% to 8% of annual gross rental income for a standard Palma de Mallorca apartment, which is a meaningful drag on net yield and is one of the reasons the gap between gross and net yield tends to be 1.0 to 1.5 percentage points in this market.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Palma de Mallorca.
What insurance, maintenance, and annual repair costs should landlords budget in Palma de Mallorca right now?
Landlord insurance for a typical rental apartment in Palma de Mallorca costs roughly 200 to 500 euros per year, depending on property size, age, and the level of cover chosen.
For maintenance and repairs, a sensible annual budget in Palma de Mallorca is around 0.5% to 1.0% of the property's value, or equivalently about 5% to 8% of annual gross rent, whichever is a more intuitive way to think about it for your specific property.
The repair expense that most commonly catches landlords off guard in Palma de Mallorca is building-level maintenance in older apartment blocks, including facade repairs, plumbing issues related to age and salt air near the coast, and unexpected community works that require special contributions on top of regular HOA fees.
Combined, insurance, maintenance, and repair costs in Palma de Mallorca typically total somewhere between 700 and 2,000 euros per year for a standard apartment, with properties in older central buildings or close to the coast tending toward the higher end of that range.
Which utilities do landlords typically pay, and what do they cost in Palma de Mallorca right now?
In Palma de Mallorca's standard long-term rental market, most landlords do not cover electricity, water, or internet for tenants, as these are almost always paid directly by the tenant under a typical residential lease, though landlords do commonly cover IBI, TRSU, and community fees as part of their regular cost stack.
In cases where landlords do cover utilities (more typical in furnished mid-term rentals), the monthly cost in Palma de Mallorca tends to run between 150 and 300 euros depending on unit size and the season, with summer air conditioning usage pushing electricity costs notably higher for properties in the city's warmer, less-ventilated buildings.
What does full-service property management cost, including leasing, in Palma de Mallorca as of 2026?
As of early 2026, full-service property management for a long-term rental in Palma de Mallorca typically costs between 8% and 10% of monthly rent plus VAT, covering rent collection, tenant communications, minor issue handling, and contract renewals.
On top of the ongoing management fee, most agencies in Palma de Mallorca charge a one-off tenant-placement fee equivalent to roughly one month's rent when they find and place a new tenant, which is an additional cost to factor into your yield calculation each time the property re-lets.
What's a realistic vacancy buffer in Palma de Mallorca as of 2026?
As of early 2026, a prudent vacancy buffer for a buy-to-let investor in Palma de Mallorca is around 8% of annual rental income, which is equivalent to budgeting for roughly one month of vacancy per year, even in a tight market.
In practice, landlords in the most in-demand areas of Palma de Mallorca (Santa Catalina, Las Avenidas, Old Town edges) may experience only two to three weeks of vacancy per year on average, while landlords in higher-yield districts like La Soledat or Son Forteza should build in one to two months as a more conservative cushion given the higher tenant turnover typical of those areas.
Buying real estate in Palma de Mallorca can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
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 Palma de Mallorca, 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 trustworthy | How we used it |
|---|---|---|
| Idealista (sale price index, Palma de Mallorca) | Spain's largest property portal with a transparent, frequently updated price index covering thousands of listings. | We used it as the primary benchmark for sale price per square meter across Palma de Mallorca and by district. We combined it with the rent index to compute gross yields at market and neighborhood level. |
| Idealista (rent index, Palma de Mallorca) | Same large dataset and published methodology as the sale index, making rent and price data directly comparable. | We used it as the primary benchmark for rent per square meter across the city and by district. We annualised the monthly figure to calculate gross yields and rent-to-price ratios. |
| Fotocasa (Palma de Mallorca index) | A major independent Spanish portal with its own pricing methodology, useful for confirming trends identified via Idealista. | We used it to cross-check the direction and level of both rent and price trends in Palma de Mallorca. When Fotocasa and Idealista pointed the same way, we treated our estimates as more robust. |
| Colegio de Registradores | A primary institutional source based on actual registered property transactions, not just asking prices. | We used it to confirm that Palma de Mallorca's strong pricing is reflected in real transactions, not inflated portal listings. We also used it to set the "good yield" threshold in context of how hard prices have run. |
| Banco de España (rental market paper) | Central bank research with careful definitions and high analytical rigour, covering Spain's residential rental market in depth. | We used it to anchor our vacancy rate assumptions and to frame why rental supply is structurally tight in high-pressure markets like Palma de Mallorca. We also used it to calibrate the cost-of-ownership assumptions in our net yield model. |
| El País (Banco de España on tourist pressure) | A leading national newspaper reporting directly on central bank analysis of how tourism affects housing supply in Balearic-type markets. | We used it to explain why long-term rental supply is structurally tight in Palma de Mallorca. We connected this directly to our vacancy buffer and property type demand sections. |
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