Rental Yield Guide by Area in Mallorca: What Investors Can Realistically Expect

Mallorca has become one of the most sought-after property investment destinations in the Mediterranean, but the question every serious buyer asks — “what yield will I actually get?” — rarely receives a straight answer. Estate agents quote optimistic projections, property portals list theoretical returns, and neither accounts for the real-world costs, regulations, and seasonal patterns that determine what ends up in your pocket. This guide sets out realistic gross and net rental yields by area, explains the critical difference between seasonal and long-term letting, and covers the tourist licence requirements that can make or break your investment.

Understanding Gross vs Net Yield in Mallorca

Before examining specific areas, it is essential to understand what “yield” actually means in the Mallorcan context, because the gap between gross and net is wider than most buyers expect.

Gross yield is the simplest calculation: annual rental income divided by the purchase price. If you buy a flat for €300,000 and rent it for €15,000 a year, your gross yield is 5.0%. This is the figure most agents quote.

Net yield accounts for the costs of ownership and letting. In Mallorca, these typically include:

• IBI (council tax): €400–3,000/year depending on the property and municipality
• Community charges: €600–3,600/year for apartments with communal areas, pools, and lifts
• Insurance: €200–600/year for a standard seguro del hogar
• Property management: 8–20% of rental income for holiday lets; 5–10% for long-term
• Maintenance and repairs: budget 1–2% of property value annually
• Non-resident income tax (IRNR): 24% on gross rental income for UK residents (post-Brexit, with no expense deductions)
• Basura (rubbish collection): €80–300/year
• Utilities between lets: electricity standing charges, water, internet

As a rule of thumb, net yield is typically 40–55% of gross yield for holiday lets managed by a third party, and 60–75% for long-term lets. A property advertised at 6% gross may deliver only 2.5–3.5% net after all costs. This is not pessimism; it is arithmetic. For a full breakdown of the tax implications, see our tax guide for property owners.

Palma de Mallorca: The Year-Round Rental Capital

Palma offers something unique in Mallorca: genuine year-round rental demand. Unlike coastal resorts that empty out between November and March, Palma’s population of 420,000, its university, hospitals, businesses, and cultural scene sustain demand twelve months a year.

Gross yield (long-term lets)	4.0%–5.5%
Net yield (long-term lets)	2.8%–4.0%
Average rent (2-bed apartment)	€1,000–1,600/month
Occupancy (long-term)	Effectively 100%
Tourist licence (ETV)	Banned for apartments since 2018

The critical factor in Palma is the ETV ban. Since 2018, holiday letting of apartments has been illegal in the city, which means your rental strategy must focus on long-term tenants (12-month contracts) or the mid-term market. The upside is that this ban has pushed enormous demand into the long-term rental market, creating a landlord-friendly environment with virtually zero vacancy. Explore current pricing data for the city on our Palma property page.

Prime neighbourhoods for rental yield include Son Espanyolet, El Terreno, and Pere Garau, where entry prices are lower than the Old Town or Santa Catalina but tenant demand remains strong. The Old Town and Santa Catalina command premium rents but also premium purchase prices, which can compress yields.

Calvià: High Season Stars, Low Season Questions

The municipality of Calvià encompasses some of Mallorca’s most popular resort areas — Santa Ponsa, Palmanova, Magaluf, and the ultra-premium Portals Nous. Rental yields here depend heavily on whether you can secure a tourist licence and how effectively you manage the shoulder seasons.

Gross yield (holiday lets with ETV)	5.0%–7.0%
Gross yield (long-term lets)	3.5%–5.0%
Net yield (holiday lets, managed)	2.5%–4.0%
Peak season weekly rate (2-bed)	€1,200–2,500/week
Occupancy (holiday let, annual)	55%–75%
Tourist licence (ETV)	Very restricted for apartments; possible for villas

The Calvià holiday rental market is highly seasonal. July and August command premium rates and near-100% occupancy. June and September are strong. May and October are reasonable. November through April is where the numbers suffer — occupancy can drop to 10–25% unless you price aggressively or target the winter-sun market. A well-managed property with a pool can achieve 20–24 weeks of bookings annually; without a pool, expect 14–18 weeks.

Palmanova and Magaluf offer the best yield potential within Calvià, as purchase prices are lower relative to achievable rents. Santa Ponsa is a solid middle ground. Portals Nous is a capital appreciation play — yields are compressed by high purchase prices, even though absolute rental income is impressive.

Pollença and Port de Pollença: Extended Season Advantage

The Pollença area in the north benefits from something most Mallorcan resorts lack: a genuinely extended tourist season. The Tramuntana mountain roads attract serious cycling tourists from February through May and again from September through November, creating rental demand well outside the traditional summer window.

Gross yield (holiday lets with ETV)	4.5%–6.5%
Gross yield (long-term lets)	3.5%–4.5%
Net yield (holiday lets, managed)	2.5%–3.8%
Peak season weekly rate (3-bed villa)	€1,500–3,500/week
Occupancy (holiday let, annual)	60%–80%
Tourist licence (ETV)	Moderately restricted; available for detached villas

Pollença’s extended season means that a well-positioned villa with a pool can achieve 26–32 weeks of bookings annually — significantly more than equivalent properties in the south-west. The established British expat community also supports a winter long-let market for retirees and remote workers seeking 3–6 month stays.

The trade-off is that properties with the best rental potential (detached villas with pools) require higher initial investment. Entry prices for rental-suitable villas start around €450,000–600,000, though townhouses in Pollença town can be found from €300,000.

Sóller and Port de Sóller: Lifestyle Over Yield

Let us be direct: Sóller is not a yield play. Property prices are high relative to achievable rents, tourist licence restrictions are severe, and the valley’s charm comes partly from the fact that it has resisted mass tourism. What Sóller offers instead is strong capital appreciation — UNESCO protection limits new supply, and demand from lifestyle buyers continues to push prices upward.

Gross yield (long-term lets)	3.0%–4.0%
Net yield (long-term lets)	2.0%–2.8%
Tourist licence (ETV)	Highly restrictive; very few new licences granted
Capital appreciation (5-year avg)	6%–9% annually

If you are buying in Sóller primarily for investment returns, you should be thinking in terms of total return (rental income plus capital growth) rather than yield alone. A net yield of 2.5% plus 7% capital appreciation delivers a very attractive total return — provided you have the patience and capital to ride out market cycles.

Alcúdia and Playa de Muro: The Value Play

Alcúdia is arguably the most compelling value proposition for rental investors in Mallorca. Lower entry prices, strong family-oriented summer demand, one of the island’s best beaches, and relatively accessible ETV licences create a combination that is hard to match elsewhere on the island.

Gross yield (holiday lets with ETV)	5.5%–7.5%
Gross yield (long-term lets)	4.0%–5.5%
Net yield (holiday lets, managed)	3.0%–4.5%
Peak season weekly rate (2-bed)	€900–1,800/week
Occupancy (holiday let, annual)	55%–72%
Tourist licence (ETV)	More accessible than most areas

Alcúdia’s rental market is driven overwhelmingly by families with young children. The shallow, calm waters of the bay are perfect for toddlers, and the area has the amenities (supermarkets, restaurants, water parks) that families need. This means your property must cater to this demographic: child-safe pools, cots, high chairs, and proximity to the beach all matter for bookings and pricing.

The main weakness is seasonality. Alcúdia is quieter outside summer than Pollença or Palma, and winter occupancy for holiday lets is low. Budget for significant income concentration in the June–September window.

Seasonal vs Long-Term Letting: Which Strategy Wins?

This is one of the most important decisions a Mallorca property investor faces, and the answer depends on your circumstances, risk tolerance, and ability to manage the property.

Holiday Letting (with ETV Licence)

• Higher gross income potential: A well-managed holiday let can generate 30–60% more gross income than a long-term let on the same property
• Higher costs: Management fees (15–20%), cleaning, laundry, welcome packs, platform commissions (Airbnb 3%, Booking.com 15%), maintenance wear and tear
• Seasonal cash flow: Income concentrated in 4–6 months; you must budget for the quiet period
• Personal use: You can block weeks for your own holidays
• Regulatory risk: ETV regulations continue to tighten; future changes could restrict your ability to let

Long-Term Letting (No ETV Required)

• Stable, predictable income: 12-month contracts with monthly payments
• Lower management costs: 5–10% management fee, minimal turnover costs
• Tenant protection laws: Spanish law strongly favours tenants; eviction for non-payment can take 6–12 months
• No personal use: Your property is occupied year-round
• No licence required: Long-term letting does not require an ETV

The Maths

Consider a two-bedroom apartment in Palmanova (Calvià) purchased for €350,000:

Metric	Holiday Let (ETV)	Long-Term Let
Gross annual income	€28,000	€16,800
Management fees	€5,600 (20%)	€1,344 (8%)
Running costs (IBI, community, insurance, maintenance)	€4,500	€3,200
Platform commissions	€2,800	€0
Net pre-tax income	€15,100	€12,256
Gross yield	8.0%	4.8%
Net yield (pre-tax)	4.3%	3.5%

The holiday let wins on yield, but the margin narrows significantly once costs are factored in. And this calculation assumes strong occupancy — a poor season or a period of needed repairs can quickly erode the advantage.

Tourist Licence (ETV): The Non-Negotiable Requirement

The Estancia Turística en Vivienda (ETV) licence is legally required for any short-term holiday letting in the Balearic Islands. Operating without one is not a grey area — it is an offence carrying fines of €20,000 to €40,000 for a first infraction, with potential for significantly higher penalties for repeat offenders.

Current Availability by Area (2026)

• Palma: ETV for apartments banned since 2018. Only villas in specific zones may apply.
• Calvià: Very restricted for multi-family buildings. Villas possible but competitive, with quotas.
• Pollença: Moderately restricted. Detached villas have reasonable prospects.
• Sóller: Highly restrictive. Very few new licences are being granted.
• Alcúdia: Relatively more accessible compared to other municipalities.
• Santanyí: Moderately available for villas; restricted for apartments.

What an ETV Licence Is Worth

A property with a valid, transferable ETV licence is typically worth 15–30% more than an identical property without one. If you are buying specifically for holiday letting, purchasing a property with an existing licence can be a far better strategy than buying without and hoping to obtain one. Always verify the licence is current, compliant, and transferable before exchanging contracts.

Realistic Income Expectations: Cutting Through the Noise

Let us set some honest benchmarks for what you can expect, based on typical properties in each price bracket:

Property Type	Purchase Price	Realistic Gross Income	Net Yield (approx.)
2-bed apartment, Palma (long-term)	€280,000–380,000	€13,200–18,000/year	3.0%–3.8%
2-bed apartment, Calvià (holiday let)	€300,000–450,000	€20,000–32,000/year	2.8%–4.0%
3-bed villa with pool, Pollença (holiday let)	€500,000–750,000	€35,000–55,000/year	3.0%–4.2%
3-bed villa, Alcúdia (holiday let)	€350,000–500,000	€25,000–40,000/year	3.5%–4.8%
Townhouse, Sóller (long-term)	€400,000–600,000	€14,400–21,600/year	2.2%–2.8%

These figures assume competent management, realistic occupancy rates, and compliance with all legal requirements. If someone promises you 8–10% net yields on Mallorcan property, be very sceptical indeed.

Post-Brexit Impact on Rental Returns for UK Investors

British investors face a significant disadvantage compared to their EU-resident counterparts when it comes to rental income taxation. As non-EU residents, UK nationals are taxed at 24% on gross rental income with no allowable expense deductions. An EU resident pays just 19% on net income (after deducting expenses). This disparity can reduce your effective net yield by 1.0–1.5 percentage points compared to an equivalent German or French investor.

The UK-Spain double taxation treaty remains in force and prevents double taxation, but it does not eliminate the higher Spanish rate. If you are considering financing your purchase with a Spanish mortgage, note that mortgage interest is not deductible for non-EU residents — another post-Brexit sting.

Key Takeaways for Yield-Focused Investors

• Highest yields: Alcúdia and Palmanova (Calvià) offer the best combination of achievable rents and accessible purchase prices, particularly with an ETV licence.
• Best risk-adjusted returns: Palma long-term lets offer lower gross yields but near-zero vacancy and minimal management headaches.
• Best total return: Sóller and prime Palma, where modest yields are supplemented by strong capital appreciation.
• Always calculate net: Gross yield means nothing if your costs consume half of it. Model every expense before purchasing.
• ETV first, property second: If your strategy depends on holiday letting, confirm the licence situation before you fall in love with a property.

The Mallorca rental market rewards preparation and punishes assumptions. Do the maths, understand the regulations, and buy with your head rather than your heart.