Deciding what to do with your property in 2025 can feel like a dilemma: should you sell it now that prices are sky-high? Or rent it out to generate long-term income? The truth is, there’s no one-size-fits-all answer, it depends on the type of property, your financial situation, personal goals, and the economic context. In this guide, we’ll talk about market trends, rental profitability levels, price evolution, legal and tax barriers, and offer key insights to help you make the best decision based on your profile.

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Current trends in the real sstate market

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The real estate market remains strong this year, and in fact, new home prices are expected to keep rising through 2025, reaching historic highs in many cases. Annual growth rates range between 4% and 9% in many urban areas across Spain, reinforcing the idea that selling now could lead to significant profit.

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On top of this, there’s a shortage of new developments, especially in major cities and coastal areas with strong international demand. Despite an increase in construction permits, the volume of new housing still falls short of market needs, further pushing prices up. All of this creates a favorable environment for those considering a sale.

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Rental profitability

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Even with rising prices, renting remains an attractive option for those looking for recurring income. In 2025, the gross rental yield in Spain is around 5.5% on average, although it varies widely by city. In places like Valencia, Barcelona, or Murcia, it can exceed 6%, while in Madrid and other more expensive capitals, it stays around 4–5%.

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In coastal areas and university cities, high demand and limited supply lead to nearly constant occupancy, increasing income stability. However, it’s important to factor in expenses like maintenance, insurance, taxes, and potential vacancy periods to calculate real net returns.

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What about selling?

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Selling now can be a smart move, especially if you own a well-located, renovated, or energy-efficient home. After several quarters of rising prices, experts anticipate that price growth may begin to slow down in 2026, creating a sense of urgency among those looking to secure a capital gain now.

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Foreign buyer demand also remains strong, especially in coastal areas and cities like Málaga, Valencia, or Alicante. For many owners, this represents an opportunity to sell quickly, with minimal negotiation and solid returns.

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Factors to consider

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Before making a decision, there are several factors worth evaluating. First, taxes: if you sell, you’ll have to pay capital gains tax on your income and possibly face municipal capital gains taxes. If you rent, you’ll need to declare the rental income and cover costs like property tax, repairs, or property management.

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The type of property also matters. A new or renovated home has better potential in both sale and rental markets. On the other hand, if it’s an older unit with no improvements, selling before new energy regulations affect its value may be the smarter option.

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Your personal profile as an owner is another key factor. If you need immediate liquidity for other projects, selling is more straightforward. But if you prefer stable income and don’t mind active management (or are willing to delegate it) renting could better align with your goals.

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Comparison: which option is best for you?

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Selling allows you to access an immediate gain and avoid long-term management. It’s a good choice if the market is high, if you don’t plan to use the property again, or if you need the funds for other investments. On the other hand, renting provides a consistent income stream and lets you benefit from property appreciation over time. It’s also a way to preserve family wealth or diversify your income sources.

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That said, renting requires effort: finding tenants, responding to issues, reporting income, and complying with current regulations. Moreover, in some cities, restrictions on vacation rentals or rent caps can reduce expected profitability, so it’s essential to analyze the market and project realistic scenarios before deciding.

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Mixed strategies

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For some property owners, the ideal isn’t choosing one path over the other, but combining them. For example, selling a property that needs renovations or is poorly located, and reinvesting in a more profitable one to rent. It’s also common to rent out the home for a few years and then sell it at a higher value.

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Another alternative is opting for medium-term rentals, aimed at professionals, students, or people in transition. This allows for slightly higher prices than traditional long-term rentals without the demands of the tourist model. This format also tends to have less tenant turnover than vacation rentals but offers higher returns than standard lease contracts.

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Both selling and renting can be very valid options in 2025, but the best decision will always be the one that fits your personal situation, financial goals, and risk tolerance. Selling offers fast liquidity and fewer complications; renting guarantees recurring income and preservation of wealth. Carefully analyzing the market, understanding the real numbers behind each option, and planning with a mid-term outlook will be key to getting the most out of your property. In this context, tools like Arrento, by Lodgerin, can be extremely helpful for property owners, as they simplify the management of medium-term rentals by connecting with verified tenants and facilitating processes such as contract signing, payment management, and optimizing the property’s performance.