- 3 min read
Is buying a second home to rent out profitable?

In recent years, the real estate sector has become a popular way to generate extra income. Many people wonder if investing in a second home in Spain is worth it and how to go about it.
In this article, we will explain what this practice entails, its benefits and drawbacks, and the key data you need to consider.
Table of Content
What does investing in a second home to rent mean?
Advantages and disadvantages of buying a second home to rent
Tips before buying a second home to rent
Profitability examples based on property type
How to rent out your second home quickly and improve profitability
What does investing in a second home to rent mean?
Purchasing a second home is a financial strategy that can serve different purposes. On the one hand, it allows you to capitalize on the property's appreciation over time when selling it in the future. On the other hand, it offers a more immediate and short-term benefit: generating passive monthly income through rental payments.
Advantages and disadvantages of buying a second home to rent
But why is this strategy so popular? What are the benefits of investing in real estate this way? Are there any disadvantages? Below, we list both the pros and cons.
Advantages of buying a second home
Passive income: Owning a second home for rent can be a great way to generate additional capital.
Relative stability: Unlike other investment practices, real estate investment tends to have lower volatility.
Diversification: Having different financial options reduces risks in case of unexpected market changes.
Tax benefits: In Spain, expenses such as mortgage interest, maintenance, and depreciation can be deducted if the property is used for rental purposes.
However, there are also some drawbacks worth considering.
Disadvantages of buying a home to rent out
High initial investment: Buying a second home requires significant capital to cover the down payment, notary fees, and potential renovations.
Maintenance costs: Attracting potential tenants requires effort and dedication, including making repairs, offering better features and services, and securing comprehensive insurance.
Legal and administrative responsibilities: You will also need to manage the rental contract, handle tenant issues, and more. Hiring a good real estate agency to manage the property can be a great way to reduce your workload.
Tips before buying a second home to rent
Before purchasing a second property to rent out, it is crucial to consider these key factors that will influence your decision and profitability:
Analyze your financial situation
It is essential to evaluate your financial standing. Key factors include knowing how much savings you have and your job stability. Additionally, long-term plans that could impact your finances should also be taken into account.
This information will give you a broader perspective on what to expect in the long run and whether you will be able to sustain the investment.
Apply for a mortgage
In most cases, securing a mortgage is necessary to purchase a second property. The previously mentioned financial details are some of the factors the bank will assess when deciding whether to approve your mortgage loan.
Study the current market situation
Understanding not only your personal financial situation but also the state of the real estate market and economy is crucial. Policy changes, economic crises, or recessions can affect the property market and mortgage rates.
Evaluate the property
Before purchasing your second home to rent out, it is essential to thoroughly assess its condition. If you lack sufficient capital for renovations—especially if they exceed initial estimates—this could become a major drawback.
Ideally, you should gather all the necessary information before proceeding with the transaction. To do so:
Ask the right questions: What is the neighborhood like? What about the neighbors? Understanding the property's surroundings will help you rent it out faster.
Obtain a property report: To avoid surprises, request this document, which informs you if there are any outstanding debts or legal issues related to the property.
Check for pending assessments: Unexpected property fees can be an additional financial burden.
Inquire about the mortgage status: If the seller has not fully paid off their mortgage, you should understand their approach. Negotiating an agreement with them might be beneficial.
Having the support of a qualified real estate agent during this process can make it much easier. Contact Engel & Völkers, and we will help you find the ideal second home to rent out.

Choose the perfect location
Selecting a city with high rental demand is crucial. Areas with excellent services and accessibility are key to attracting tenants. This way, you can ensure that your property remains occupied.
Consulting with a qualified professional or attending real estate fairs can be a great way to discover exclusive investment opportunities.
Assess the expected profitability
Another key factor in making your rental investment profitable is analyzing the relationship between rental income and associated costs. Ideally, you should aim for an annual return of at least 5-7% of the property's total value to ensure profitability.
Consider the associated risks
As a landlord and owner of a second home, you should be aware that unexpected situations may arise, such as tenant payment defaults, extended vacancy periods, or changes in regulations that could impact your rental income.
Profitability examples based on property type
But which type of rental is more profitable? Where should you buy a second home to maximize your investment? Two key factors will determine the answer to these questions.
Profitability of traditional rentals in major cities
Large cities—or provincial capitals—offer a high concentration of services and job opportunities, leading to strong rental demand. In this case, profitability tends to be moderate, but the risk of long vacancy periods is lower.
This is the ideal rental type for those seeking stability and minimal management effort, as leases tend to be long-term.
Profitability of vacation rentals in tourist areas
Conversely, tourist areas, such as coastal regions, experience greater fluctuations in rental income. On the one hand, you can earn higher profits during peak seasons due to increased demand. However, there will also be low-demand periods.
This type of rental requires more time and effort in marketing, booking management, and frequent maintenance.
At Engel & Völkers, we provide an annual report that outlines real estate market trends in sales and rentals. This information helps you determine the best location based on your requirements.
Of course, our real estate agents are ready to assist you in analyzing this data, advising you, and guiding you through the process.
How to rent out your second home quickly and improve profitability
If you want to achieve better results, consider following these strategies:
Make renovations:Increasing the property's value by enhancing its features will make it more attractive to tenants, helping you rent it out faster.
Study the market: Understanding real estate trends and market conditions will allow you to set a competitive price and attract tenants.
Enhance the property's appearance: A picture is worth a thousand words—even in real estate. If your second home is furnished, consider using home staging techniques to make it more appealing to potential tenants.
Take high-quality photos: Professional photos will highlight the property's best features.
Write an effective listing: Emphasize the most attractive aspects of your home in the rental listing to capture the attention of potential tenants. AI tools can help streamline this process.
Choose the right tenant: Conduct multiple interviews and select a tenant based on your criteria—such as income level.
Get rental default insurance: Although it adds an extra cost, it provides financial protection in case of tenant payment issues.
Hire a real estate agency: Engel & Völkers agents can advise you and handle all the necessary procedures to maximize the return on your real estate investment.
As you can see, purchasing a second home to rent out can be highly profitable, as long as you consider key factors such as your financial outlook and the state of the property or market.
If you are thinking of investing in a second home to generate extra income, take advantage of expert guidance. At Engel & Völkers, we are eager to help you achieve your goal.
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Avenida Diagonal 640, 6B
08017 Barcelona, España
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