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Sweden offers attractive rental yields averaging 5.6% nationally, with significant opportunities for investors willing to look beyond Stockholm.
University cities like Uppsala deliver yields above 7%, while even Stockholm provides stable returns around 4.2% despite high property prices. Property taxes remain low at 0.75% maximum, and strong tenant protections ensure stable rental income across the country.
If you want to go deeper, you can check our pack of documents related to the real estate market in Sweden, based on reliable facts and data, not opinions or rumors.
Swedish rental yields vary dramatically by location, with university cities offering the highest returns and Stockholm providing lower but stable yields.
Short-term rentals can significantly outperform traditional letting, though regulations vary by municipality.
| City | Average Yield (%) | Property Price Range | Best Property Type |
|---|---|---|---|
| Stockholm | 4.2-5.7 | SEK 6.8-7.0 million | 1-2 bedroom apartments |
| Uppsala | 7.0+ | SEK 3-4 million | 2-3 bedroom apartments |
| Gothenburg | 5.0-7.1 | SEK 5.1 million | Small apartments |
| Malmö | 6.0-6.5 | SEK 3.7-4.0 million | Apartments |
| Rural Areas | 5.0-7.0 | SEK 0.5-2.0 million | Various property types |
What are the average rental yields in Sweden by city?
Swedish rental yields vary significantly across cities, with Stockholm offering the lowest returns despite being the capital.
Stockholm delivers average yields of 4.2% for apartments, with city center properties ranging from 4.1% to 5.7%. Prime central districts tend toward the lower end due to exceptionally high property prices.
Gothenburg performs better with yields between 4.6% and 7.1%, depending on district and property size. The city averages around 5.0% overall, with smaller apartments in suburban areas delivering the highest returns.
Malmö stands out as one of the most profitable major cities, with gross yields averaging 6.0% for apartments and some districts exceeding 6.5%. The combination of reasonable property prices and strong rental demand makes it particularly attractive for investors.
Uppsala leads the pack with notably high yields around 7.0%, especially for 2- and 3-bedroom apartments which sometimes exceed 8% due to consistent student demand from Uppsala University.
Which regions in Sweden offer the most profitable rental property investments?
University cities consistently deliver the highest rental returns in Sweden, driven by stable student populations and growing professional markets.
Uppsala and Lund top the profitability rankings, with yields often exceeding 7% due to strong academic presence and limited housing supply. These cities benefit from year-round demand that remains stable even during economic downturns.
Suburban districts in major cities provide excellent middle-ground opportunities, particularly Hisingen in Gothenburg and emerging urban areas with ongoing development projects. These locations offer moderate property prices while maintaining steady rental demand.
Secondary urban centers like Örebro, Västerås, and Linköping present compelling investment cases with yields typically ranging from 5.5% to 6.5%. These cities benefit from growing tech sectors and improving transportation links to Stockholm.
Rural areas near major cities can deliver yields of 5-7%, though demand tends to be more volatile and seasonal, particularly in tourist-dependent regions.
What property types provide the highest rental returns in Sweden?
Apartments, particularly 1-2 bedroom units, consistently provide the highest and most stable rental returns across Sweden.
| Property Type | Average Yield (%) | Target Tenant | Management Complexity |
|---|---|---|---|
| 1-2 Bedroom Apartments | 5.5-7.5 | Singles, couples, students | Low |
| 3+ Bedroom Apartments | 4.5-6.5 | Families, professionals | Medium |
| Houses | 4.0-6.0 | Families | High |
| Commercial Spaces | 4.5-7.0 | Businesses | Very High |
| Student Housing | 6.0-8.5 | University students | Medium |
Small apartments dominate the rental market due to high demand from singles, young couples, and students who comprise the majority of Sweden's rental population. These properties also require minimal maintenance and management compared to larger units.
Commercial spaces can offer competitive yields but require specialized management skills and carry greater vacancy risks, particularly in smaller markets. New commercial developments may provide attractive initial returns but face uncertainty during economic downturns.
How do property prices vary across Sweden's major cities?
Property prices in Sweden show dramatic variation between major cities, with Stockholm commanding premium prices that significantly impact rental yields.
Stockholm averages SEK 6.8-7.0 million for houses and approximately €9,744 per square meter for apartments, making it one of Europe's most expensive property markets. These high prices directly contribute to lower rental yields despite strong rental demand.
Gothenburg offers more reasonable pricing at SEK 5.1 million for average houses and €5,446 per square meter for apartments. This 20-30% discount compared to Stockholm allows for more attractive rental yield calculations.
Malmö presents the best value proposition among major cities, with houses averaging SEK 3.7-4.0 million and apartments around €2,500 per square meter. These lower entry costs enable the higher yields that make Malmö attractive to rental property investors.
Rural properties can be acquired for SEK 0.5-2.0 million depending on location and condition, with per-square-meter costs ranging from €1,000-3,000. While yields can be attractive, investors must carefully assess local employment and demographic trends.
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What rental yields can I expect in Stockholm versus rural Sweden?
Stockholm and rural Sweden represent opposite ends of the Swedish rental yield spectrum, each offering distinct advantages for different investment strategies.
Stockholm delivers average yields of 4.2% for apartments, with prime central locations sometimes dropping below 2% due to extremely high property values. However, Stockholm provides exceptional capital appreciation potential and virtually guaranteed occupancy rates.
Rural areas typically generate gross yields of 5-7%, reflecting significantly lower purchase prices and often adequate rental demand. Properties costing SEK 0.5-2.0 million can generate monthly rents of SEK 4,000-10,000 depending on size and location.
Stockholm's rental market benefits from continuous demand from international professionals, students, and domestic migrants, ensuring minimal vacancy periods and consistent rental growth. Rural areas face more volatile demand patterns tied to local economic conditions and seasonal factors.
It's something we develop in our Sweden property pack.
How does property tax affect rental yields in Sweden?
Swedish property taxes remain relatively modest compared to many European countries, having minimal impact on overall rental yields.
Property tax is capped at 0.75% of assessed value, with a maximum of SEK 10,074 per residential building for 2025. Multi-unit apartment blocks face even lower flat rates, making rental properties particularly tax-efficient.
Rental income faces a 30% tax rate, but mortgage interest, maintenance costs, and property management expenses are fully deductible. This system typically reduces gross yields by 1.5-2 percentage points, netting 3-4% in most urban areas.
Property owners can deduct renovation costs, property management fees, insurance, and even travel expenses related to property management. These deductions significantly offset the rental income tax burden for active landlords.
The tax system actually favors rental property investment compared to many other investment vehicles, particularly when considering the deductibility of mortgage interest against rental income.
What are typical monthly rents in Sweden's major cities?
Swedish rental prices reflect the country's strong economy and high living standards, with significant variation between cities and property sizes.
| City | 1-Bedroom Apartment (SEK) | 2-Bedroom Apartment (SEK) | 3-Bedroom Apartment (SEK) |
|---|---|---|---|
| Stockholm | 12,000 | 16,000 | 20,000-22,000 |
| Gothenburg | 10,000 | 13,000 | 16,000-18,000 |
| Malmö | 9,000 | 12,000 | 15,000-17,000 |
| Uppsala | 8,500 | 11,500 | 14,000-16,000 |
| Rural Areas | 4,000-6,000 | 6,000-8,000 | 8,000-12,000 |
Stockholm commands the highest rents, with premium locations in city center reaching SEK 15,000+ for one-bedroom apartments. These high rents partially offset the city's expensive property prices for investors.
Regional cities offer more balanced rent-to-price ratios, with Malmö providing particularly attractive opportunities for cash-flow-focused investors seeking immediate returns.
How strong is tenant demand in Sweden and its impact on rental income?
Sweden maintains exceptionally strong tenant demand across major urban centers, driven by ongoing urbanization and international migration.
Stockholm, Gothenburg, Malmö, and Uppsala benefit from continuous demand due to expanding tech sectors, prestigious universities, and Sweden's attractive quality of life for international professionals. Vacancy periods typically last less than two weeks in desirable areas.
University cities experience particularly stable demand patterns, with student populations providing consistent baseline demand supplemented by growing professional markets. Uppsala and Lund maintain occupancy rates above 97% even during economic uncertainties.
Rural and seasonal areas show higher demand volatility, often tied to tourism seasons and local economic conditions. Properties in popular tourist destinations may achieve premium rates during summer months but face challenges during off-seasons.
The influx of international workers and students continues driving rental demand, particularly for furnished apartments and properties with flexible lease terms that accommodate Sweden's mobile professional workforce.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Sweden 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 are the vacancy rates for rental properties in Sweden?
Swedish rental properties maintain remarkably low vacancy rates, particularly in urban areas where housing shortages persist.
Urban apartments typically experience vacancy rates below 3%, with many desirable districts maintaining occupancy above 97%. Stockholm, Gothenburg, and university cities rarely see properties vacant for more than a few weeks.
The national average for residential rental properties ranges from 2-5%, with lower values concentrated in growth markets and higher rates in declining industrial regions. This compares favorably to most European markets.
Recent commercial office space has seen elevated vacancy rates reaching 9-14% in some Stockholm outer areas during 2025, but this trend hasn't affected residential rental properties which continue experiencing housing shortages.
Seasonal tourist areas may experience higher vacancy rates during off-peak months, but annual occupancy rates often remain strong due to summer premium rates compensating for winter gaps.
How do rental agreement lengths influence income stability in Sweden?
Swedish rental agreements strongly favor long-term stability, providing landlords with predictable income streams while offering tenants security.
Standard rental agreements are typically indefinite or minimum one-year terms with notice periods of 1-3 months. This system creates stable income for landlords while providing strong tenant protections that reduce turnover.
Swedish tenancy laws heavily favor tenants, making evictions difficult and providing security of tenure that encourages long-term occupancy. Most tenants remain in properties for multiple years, reducing void periods and turnover costs.
Shorter fixed-term agreements are possible but primarily used for student housing and corporate lets. These arrangements allow for more frequent rent adjustments but may involve higher management intensity.
It's something we develop in our Sweden property pack.
What legal requirements and costs apply to renting out property in Sweden?
Swedish rental property regulations emphasize strong tenant protections while maintaining reasonable compliance costs for landlords.
1. **Registration Requirements**: All rental income must be declared for tax purposes, with detailed records required for deductible expenses and property management costs. 2. **Deposit Regulations**: Security deposits typically range from 1-3 months' rent, with strict guidelines on deposit protection and return procedures upon tenancy termination. 3. **Subletting Permissions**: Subletting requires explicit landlord permission and must comply with strict guidelines, particularly important for properties in cooperative housing associations. 4. **Rent Control Measures**: Annual rent increases are regulated and must follow established procedures, limiting rapid rent growth but providing income predictability. 5. **Eviction Protections**: Strong tenant protections make evictions challenging and expensive, requiring substantial documentation and legal grounds for removal.Compliance costs remain modest compared to property management fees, but landlords must maintain detailed documentation and follow proper legal procedures throughout the tenancy relationship.
How do short-term versus long-term rental yields compare in Sweden?
Short-term rentals can significantly outperform traditional long-term letting in Sweden, though regulatory constraints vary by municipality.
Short-term platforms like Airbnb often deliver 20-50% higher gross returns than long-term rentals, particularly in tourist destinations and major cities. Premium locations can generate enough income to cover mortgage payments entirely during peak seasons.
Stockholm and other major cities have implemented various restrictions on short-term rentals, including HOA prohibitions and municipal regulations that limit operation periods. Always verify local bylaws before entering short-term rental markets.
Long-term rentals provide more stable, less management-intensive income with strong tenant protections ensuring consistent occupancy. This approach suits investors seeking passive income without active property management.
Tourist areas and scenic rural locations particularly benefit from short-term rental strategies, with summer rates often 2-3 times winter levels. However, seasonal fluctuations require careful cash flow planning and higher marketing efforts.
It's something we develop in our Sweden property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Swedish rental yields present compelling opportunities for investors willing to look beyond Stockholm's expensive market.
University cities like Uppsala offer exceptional returns above 7%, while even major cities provide stable yields supported by strong tenant demand and low vacancy rates.
Sources
- Global Property Guide - Sweden Rental Yields
- InvestRopa - Buying House Sweden
- Airbtics - Best Airbnb Markets Sweden
- InvestRopa - Sweden Real Estate Trends
- Swedcohost - Vacation Rental Revolution
- Global Property Guide - Short vs Long Term Rentals
- InvestRopa - Average House Price Sweden
- InvestRopa - Sweden Which Area
- Skatteverket - Property Tax Sweden
- Nomad Tax - Swedish Real Estate Tax