2 highly profitable types of property investment you should know about

Is property investment really profitable? How to invest in property?                      Today, as experts in the property sector, we’re here to clarify these questions that may arise when purchasing a property.

When you have capital to invest, one of the most frequent questions amongst Spanish investors is: what type of property investment offers the best return at present?

The property sector remains one of the most solid alternatives for investment and this is because properties not only generate passive income through rental, but also tend to appreciate over time, offering a double financial advantage.

Currently, two trends stand out within the Spanish property market as the most attractive options for those seeking profitability in their property investment and medium to long-term stability.

Both respond to the evolution of demand, changes in consumer habits and an economic context that continues to favour investment in property assets.

Analysing each strategy in detail allows for decisions more aligned with investment objectives, whether through how to invest in property in high-demand areas or exploring new forms of profitable property investments.

Below, we review what these two investment formulas are and why they continue to generate so much interest amongst investors.

Is it profitable to invest in property currently?

Yes, investing in property in Spain continues to be an attractive alternative for many investors in Spain in 2026.

The latest official data published by the INE shows that in the third quarter of 2025, the Housing Price Index (IPV)—which measures the evolution of property sale and purchase prices—rose by 12.8% year-on-year compared to the same period in 2024.

This increase includes both new housing (which rose by 9.7%) and second-hand housing (which increased by 13.4%) and represents one of the highest rates in recent years. These official data confirm that housing prices continue in a clear upward trend.

Regarding rentals, sources such as the Bank of Spain indicate that the gross profitability of renting a property in Spain has remained at levels that may be interesting for investors (between 3.1% and 3.3%).

Compared to other more conservative investment alternatives, such as bank deposits or government bonds, the current figures for purchasing and renting properties give many investors protection against inflation and returns above traditional financial products.

Discover what makes a property investment profitable

Not all investments are equal, and in the property sector this is especially noticeable. The key lies in identifying opportunities that combine security, growth potential and real appeal.

Think of it as finding the hidden gem of the market: a property that not only generates rental income, but also appreciates over time, benefits from a prime location and is integrated in an area in full development.

These are the series of elements that enhance the profitability of your investment:

Buying in a strategic location

Location remains the most determining factor for profitability. Investing in areas with high rental demand, good connectivity and nearby services increases the chances of generating stable income and appreciating the property in the long term.

Our team of property investment experts will help you choose the right location that best suits your objectives, whether to generate income through rental or to maximise appreciation in a future sale.

We advise you on ➨ How to choose the best location for your luxury home

Infrastructure and local services

Proximity to public transport, international schools, medical centers, green spaces, restaurants, and shopping centers multiplies the property’s attraction for tenants or buyers, ensuring constant occupancy and income stability.

Discover our guide to ➨ The best international schools in Valencia

Expansion potential and urban development

Knowing the urban planning and projects in the area allows you to anticipate future appreciation of the property. Emerging or transforming areas usually offer more accessible prices and high growth potential.

Tenant profile

Analyzing what type of tenant the property attracts—families, young professionals—can help you adjust the rental strategy and maintain constant occupancy, increasing net profitability.

Properties situated in emblematic areas of the city and luxury residential developments, usually preferred by families, tend to maintain more stable occupancy and longer-term rental contracts.

Discover ➨ The best luxury urbanizations in Valencia.

The 2 most profitable types of property investment

There are multiple properties in which to invest: homes, offices, commercial premises, villas or parking spaces. However, some strategies offer greater profitability and stability.

Below, we analyze the two most prominent types of property investment in the current market: buy-to-let and buy-to-sell.

Buy-to-let

One of the most common and proven strategies within the property sector consists of buying a property to let it.

It generates constant periodic income and, when well planned, offers security against the volatility of other financial markets, such as shares or investment funds.

This option requires thorough analysis prior to purchase. It’s essential to calculate the investment recovery period, anticipate additional expenses (maintenance, renovations, insurance) and evaluate the investor’s financial capacity to face the acquisition, whether through own capital or bank financing.

Furthermore, success depends on finding reliable tenants and maintaining the property in optimal condition. Good management by an expert advisory team ensures constant occupancy and reduces risks associated with non-payment or property deterioration.

There are several strategic factors that, when well planned, allow you to optimize the profitability of your property investment and ensure solid long-term results:

• High demand and low supply: Investing in properties with high demand and limited supply allows setting more attractive rents and ensures stable occupancy.

For example, villas and luxury houses near international schools or established residential areas are usually highly sought after by foreigners or families looking for a quieter environment.

• Strategic location: Proximity to public transport, services, shops, hospitals and green spaces increases the property’s appeal and contributes to its appreciation.
• Type of rental adapted to the market: Choosing between short-term or long-term rental according to local demand can improve income and reduce tenant turnover.

According to the type of rental, we can differentiate between:

Short-term rental

This type of rental is characterized by properties located in tourist areas, university areas or near business areas that can generate high profitability and even allow personal use of the property by the owner.

However, it requires greater dedication in management and wear and tear on the property is greater due to frequent tenant turnover.

Long-term rental

Long-term rental offers stability in occupancy and less wear and tear on the property compared to short-term rental.

This modality allows planning income in the medium and long term in a more predictable way.

Furthermore, having expert advice is fundamental to select the right tenant, optimise contract management and ensure that the investment remains profitable and secure.

Discover more about ➨ What you need to rent a flat in Spain.

Buy-to-sell

Have you ever heard of house flipping? This property investment strategy consists of buying a property, renovating it and selling it at a significantly higher price, seeking to maximize the profit margin in a relatively short period.

Currently, returns on this type of investment can reach up to 20%, provided the right opportunities are identified and the purchase, renovation and sale process is managed correctly.

How to invest in property: find the perfect opportunity

Buying a property at an attractive price is possible, generally, under some of these circumstances:

• The property needs urgent renovation that the owner cannot afford.
• The owner urgently needs to sell for personal or financial reasons.

For investment in house flipping to be successful, it’s essential to have a good eye for spotting opportunities and working in markets with high demand, where renovated properties sell quickly.

Risks and precautions

Buying to sell carries a higher level of risk than other property investments. A bad decision in the acquisition or an incorrect estimate of the renovation cost can translate into financial and time losses.

That’s why having specialised professional advice is important: an expert helps you evaluate the viability of the transaction, accurately calculate costs and ensure the investment maintains its potential profitability.

Furthermore, this type of investment requires sufficient financial capacity to face both the purchase and the renovation of the property. Therefore, it’s essential to carry out an exhaustive review of the property’s condition before acquiring it, to know the real cost of the investment and guarantee that the transaction is profitable.

Personalized advice and investment opportunities

At Monserrate Inmobiliaria we have a highly qualified team that will help you identify the type of property investment that best suits your profile, considering potential profitability and your personal objectives.

Our commitment is to offer expert advice so that every investment decision is safe and profitable.

Discover the residential areas and developments where we operate and contact us with any questions or queries.

We are specialists in residential property investment and our objective is to accompany you throughout the entire process so you find the property that best suits your needs.

Get to know your next investment in person with Monserrate

If you wish to view any of our exclusive properties in person, our team will be delighted to assist you in a personalised manner, offering advice tailored to your preferences and lifestyle.

We will arrange a private viewing of the properties that best match your expectations, guaranteeing a comfortable experience completely adapted to what you’re looking for.

☎️ Contact us and discover Valencia’s most exclusive developments for your next investment or home. Our team will accompany you at every step so your investment is safe, profitable and aligned with your objectives.

Frequently asked questions about property investment

How is the profitability of a property investment calculated?

The profitability of a property investment is calculated by dividing the annual net profit (rent minus expenses) by the property’s acquisition price. This calculation helps you determine the return on your property investment.

What are the best types of properties to invest in with high profitability?

Residential properties in expanding cities, as well as commercial real estate in strategic locations, offer the best prospects for property investment profitability.

Additionally, properties in tourist areas or near business centres can generate a constant flow of income.

Is real estate investment in international markets profitable?

Real estate investment in international markets can be very profitable, especially in growing cities or in countries with high property demand indices. 

However, it’s important to evaluate the political, tax and economic risks of each region before investing.

How can I obtain a high return on my property investment?

To obtain a high return on your property investment, it’s key to choose well-located properties, carry out correct rental management, and explore options for improvements or renovations that increase the property’s value in the long term. Furthermore, diversifying your property portfolio can reduce risks.

What factors should be considered when making a property investment abroad?

When making a property investment abroad, it’s important to consider the country’s political and economic stability, local property laws, rental demand in the area, and taxes related to property investments.

Also, taking into account property investment profitability in the region will help make more informed decisions.

Is it better to invest in rental properties or in real estate for long-term appreciation?

Both options can be profitable depending on your financial objectives. Investing in rental properties generates recurring income, whilst long-term investments can offer great benefits if properties increase their value significantly. The choice depends on your personal investment strategy.

How to make the most of real estate investment?

Real estate investment can be highly profitable if approached strategically. To make the most of this opportunity, it’s essential to research the local market, identifying areas with high demand and appreciation potential.

At Monserrate real estate agency, we are experts in the property sector and have extensive experience helping our clients make intelligent and profitable investments. If you’re looking for advice or support to maximise your opportunities in real estate, we can help you make the best decisions and guide you throughout the process.