Buy-to-Let in Spain: Is Student Housing the Smartest Investment?

Students are filling apartments and shared flats near universities across Spain. Many buildings that once housed residents now rent mostly to students, with leases usually lasting the full academic year. Rents are rising slowly in most areas. At the same time, some neighborhoods remain crowded with tenants, especially near major campuses. Local rules and new developments affect which areas are easier to rent or buy. The growing number of students is quietly changing the housing market in cities across Spain. If you’re thinking about investing in student housing, this is a good time to start looking.

International Student Growth and Rental Demand in Spain

International student enrollment across Spain has grown steadily over the past decade. Cities like Madrid, Barcelona, and Valencia now host far more foreign students than they did ten years ago, and the increase continued after the pandemic.

With more students arriving and staying longer, finding affordable long-term rentals has become a common challenge. Students often start searching months before arrival, but options are limited, and affordable rooms are taken quickly. To meet demand, some buildings are divided into multiple bedrooms, while others are offered on short contracts. Even so, securing a long-term lease for a full academic year at a reasonable price can be difficult.

Rents in student neighborhoods are rising gradually, though levels vary by city and district. Most student apartments for rent in Spain​ fill quickly at the start of the academic year and stay occupied throughout the term. Landlords adjust prices each year to match demand. Some buildings that once had mixed tenants now rent mostly to students, because of the growing student presence.

Exchange programs and English-taught degrees bring students from many countries. Short-term exchange students arrive each semester, while students enrolled in full programs often stay for nine to twelve months. These programs make it easier for non-Spanish speakers to enroll, which expands the pool of students looking for housing beyond the traditional European exchange groups.

The steady growth of students puts pressure on housing near universities. Many apartments that once housed residents are now rented to students, and some buildings gradually shift to full student occupancy as leases change hands. Families and other long-term tenants sometimes move to districts with lower rents or more stable leases. At the same time, Spain's university housing stock has not expanded as quickly as student enrollment, making the market around major campuses tighter and leaving fewer options for both students and long-term residents.

Buy-to-Let Investment Dynamics in Student Housing in Spain

Student housing in Spain has attracted steady interest from investors because it often delivers higher returns than traditional residential rentals. In 2023–2024, standard long-term apartments generally had gross yields of 4% to 5.4%, while shared student flats and purpose-built student accommodation (PBSA) often reached 6% to 10%, depending on location and management.

Renting by the room rather than the entire apartment also allows income to be collected more steadily throughout the year. Investment briefings from 2024 by groups such as Hines and Greystar noted that these higher yields are a key reason investors who buy property in Spain remain active in the sector.

Student Rental Demand in Spain: Occupancy Rates

High occupancy is a consistent feature of student housing. In 2024, institutional investors and sector analysts reported levels often exceeding 90% in major university cities. Most leases follow the academic calendar, running nine to twelve months, with vacancies mainly in summer. This short off-season allows owners to schedule repairs and upgrades, creating a steady flow that people who invest in Spanish property consider one of the sector’s most stable features.

Entry Prices for Student Property Investment in Spain

The cost to invest in student housing depends on the city, the type of property, and how close it is to campus. Smaller shared flats near universities usually cost less than larger apartments in central areas aimed at families.

In 2023–2025, mortgage rates in Spain were generally trending lower than before, making borrowing more affordable for investors. With cheaper loans, some investors could pay more for properties, while others chose to buy sooner. To fund purchases, some relied on standard buy-to-let mortgages, while others used money from their own holdings. Tax rules introduced in 2023 added further benefits for renting to young tenants or using certain lease types, improving potential returns. For most investors in this market, the focus remains on steady rental income in Spain.

Regulations and Housing Law Updates Affecting Spain’s Student Accommodation Market

Regulations continue to shape landlord decisions. Spain’s Law 12/2023, passed in May 2023, introduced rent controls in certain stressed areas and limited annual increases for primary residence leases to about 2.2% in 2025 under the IRAV index.

Student rentals, however, are often classified as temporary or seasonal, so they follow slightly different rules. Even so, landlords keep an eye on changes at both national and local levels. Legal updates, contract classifications, licensing, and tax treatment can all shift over time, making the regulatory framework an important factor before buying a property in Spain as a foreigner.

Trends in Student Housing Investment in Spain and Market Growth

Investor profiles in the student housing market have broadened in recent years. Individual landlords continue to buy shared flats near campuses, especially in established university cities, while institutional groups have been expanding their presence at the same time.

In 2024, sector data recorded roughly €756 million in institutional investment in Spanish student housing. Some investors focus on a single property for steady rental income in Spain, while others build portfolios across one district or several cities.

How Spain’s Elite Universities Influence Nearby Rental Markets

Global rankings of top Spanish universities

• University of Barcelona: ranked global top 200 in major league tables
• Complutense University of Madrid: ranked global top 200–250
• Autonomous University of Barcelona: ranked global top 200
• Autonomous University of Madrid: ranked global top 250
• Pompeu Fabra University: ranked global top 250

Several global ranking releases in 2024 and 2025 noted that Spain had roughly 15 universities within the top 500 worldwide. Madrid, Barcelona, and Valencia appeared most often in those listings.

Rental listings near these top-ranked universities generally carry higher prices than units farther away. In 2024, brokerage market snapshots highlighted consistent rent premiums in districts close to major campuses, such as Moncloa-Aravaca in Madrid and Les Corts in Barcelona. Students often prioritize being near lectures and public transit.

University reputation has a steady, if quiet, impact on investor attention on the rental property market in Spain. Global rankings influence where students choose to study, and student mobility drives housing demand near campuses. Cities with several high-ranking universities tend to see sustained interest in student rentals.

Exchange programs and English-taught degrees, which numbered over 2,000 across Spain by 2024, expand the number of tenants and help keep occupancy levels steady. Campus expansions and new facilities can also raise property values in nearby streets over several years, especially in areas where enrollment continues to grow.

The Best Cities in Spain for Student Property Investment

Madrid

Madrid is Spain’s largest student hub, with over 300,000 students and nearly twenty universities. Because so many students compete for housing, occupancy stays high across most districts, which keeps rental yields strong: around 4% to 5% in 2024, and over 6% in places like Tetuán and Usera. High property prices in central areas have pushed some investors to look at secondary neighborhoods, where demand is still steady but entry costs are lower.

Barcelona

Barcelona, one of the top expat rental hotspots in Spain, attracts large numbers of international and domestic students, which keeps occupancy high in popular districts. In 2024, yields in central areas like Eixample and Gràcia averaged around 5.9%, but high property prices have pushed some demand toward neighborhoods such as Sant Martí.

Valencia

Valencia has emerged as a popular choice for student housing investors because the city combines strong demand with lower property prices than Madrid or Barcelona. In 2024, gross yields ranged from 6% to 7%, and areas near universities like Benimaclet attract both international students in Spain.

Salamanca

Salamanca is a historic university city with lower property costs, which makes it easier for small investors to enter the market. In 2024, yields were in the mid-single digits. Most tenants are Erasmus or language students, who tend to stay near the campus and city center, keeping these neighborhoods busy throughout the academic year.

Emerging “Student Cities” Beyond the Big Three

Beyond Madrid, Barcelona, and Valencia, cities such as Granada, Sevilla, and Málaga are attracting more attention from student-housing investors. Because the entry prices are way lower comparatively, and student populations are dense, high occupancy near campuses is expected. This combination often produces stronger yields.

Demand for housing in these areas is smaller than in the largest cities but remains steady across academic cycles, especially in neighbourhoods near universities. For that reason, these locations continue to be included in the best cities in Spain for student property investment.

Find Your Dream Property with TEKCE Real Estate

If you’re ready to explore student housing opportunities in Spain, as TEKCE, we can assist you in finding the right property. Additionally, the services we provide with TEKCE Property Management help your investment run smoothly, including professional tenant support and full lease management. Reach out today to start planning your entry into this growing market.

RELATED PAGES

Renting in Spain as an Expat: Top Cities & Investment Hotspots

Navigating Spain's New Short-Term Rental Regulations and Concerns

Rental Income in Spain: Benefits, Tax, and Legal Essentials