Profitability of owning a luxury home in Costa Blanca: investing with style and vision

The Costa Blanca has become one of the most desirable destinations for living, vacationing, and investing. Owning a luxury home in this region is not only a lifestyle statement, but also a smart financial decision.

In this article, we analyze the potential profitability, the factors that determine it, and why more and more investors are investing in this Mediterranean gem.

A luxury property: much more than a home

When we talk about a luxury home, we're not just referring to architectural design or fine materials. We're talking about a home that offers a complete living experience: views, privacy, surroundings, exclusive services, security, and a location that transforms every day into a privilege.

Owning a luxury home on the Costa Blanca isn't just synonymous with well-being. It can also be a source of steady income if properly managed as a vacation or medium- to long-term rental. According to data from the Idealista website and Euroval studies, beachfront properties in premium areas such as Moraira or Jávea command a nightly price of between €300 and €1,000, depending on the features and season.

Costa Blanca: a location with growing demand

The Costa Blanca, located in the province of Alicante, is one of Europe's most attractive destinations for those seeking sun, sea, culture, and an excellent quality of life. Its highlights include:

• Warm weather all year round: ideal for international residential tourism.
• Connectivity: regular flights from major European capitals.
• Modern infrastructure: high-level medical services, international schools, shopping centers.
• Natural and cultural environment: beaches, mountains, charming towns, prestigious gastronomy.

These conditions attract not only tourists but also investors seeking security, stability, and profitability. Especially in areas like Altea, Moraira, Benissa, Calpe, Albir, and Jávea, where the demand for high-end homes continues to grow.

What is a good return on a home?

This is one of the most frequently asked questions among those considering investing in real estate.

• Gross profitability: is calculated by dividing the annual rental income by the purchase price of the property. A good return is usually between 4% and 7% gross annualIn the case of luxury properties, it is common to move within a range between 3.5% and 5.5%, depending on location and management.
• Net profitability: deducting expenses (maintenance, property tax, insurance, management), the realistic net profitability of a well-managed luxury home on the Costa Blanca can be between 2.5% and 4% annually.

The Tinsa portal He adds that the average annual capital gain on homes on the Costa Blanca is 2.2% in prime areas, which represents an attractive combined total profitability (rent + appreciation) of up to 6.5%.

Factors that influence the profitability of a luxury home

1. Exact location within the Costa Blanca

Areas with better views, access to private coves, proximity to marinas or golf courses tend to offer higher demand and higher rental prices.

• Altea Hills, Cumbre del Sol, Sierra Cortina, and Moraira are premium areas with extremely high occupancy, low rental turnover, and high loyalty.

2. Quality of design and equipment

A luxury home that combines modern architecture with Mediterranean elements, and includes a swimming pool, home automation, security, manicured gardens, and relaxation areas, makes a significant difference in the rental price.

Interior design experts agree that aesthetics, thermal and acoustic comfort, and energy efficiency are key differentiating factors for the enhancement of these properties.

3. Services and lifestyle offered

High-end tenants are looking for more than just a home: they want privacy, ocean views, access to signature cuisine, proximity to marinas, spas, golf clubs, or yoga studios.

Areas with wellness resorts, beach clubs, or ports like Marina Greenwich or the Moraira Yacht Club generate greater demand throughout the year.

4. Season and type of rental

• Vacation rentals (weekly in summer): more profitable but with higher turnover.
• Medium-term rentals (1-6 months): highly sought after by expats and teleworkers.
• Annual rental: lower profitability but stability.

In some municipalities, tourist rentals are regulated and require specific licenses. Having legal advice ensures regulatory compliance and avoids penalties.

5. Real estate manager or professional agency

An expert team can maximize occupancy, position the property correctly, and handle legal, tax, and logistical aspects. Fotocasa studies show that properties managed by specialized agencies have up to 30% higher annual occupancy.

Reference figures: realistic example of profitability

Let's imagine a luxury villa in Altea Hills:

• Purchase price: €1,300,000
• Annual income from vacation rentals: €70,000
• Annual expenses (maintenance, property tax, agency, insurance): €18,000
• Gross profitability: 5,38%
• Net profitability: 4.0%

If we add to this an estimated annual appreciation of 21%, the total return amounts to 61% compounded annually. This is an excellent return for an asset that can also be enjoyed on vacation or weekends.

Current trends: international demand and teleworking

Since the pandemic, the buyer profile has changed. Many Europeans are looking for second homes that can be converted into permanent residences. The rise of remote working has boosted demand for homes with an office, good connectivity, green areas, and a pool.

The Costa Blanca has been one of the biggest beneficiaries of this change:

• High demand from Nordic, French, Belgian, German and British buyers.
• New promotions adapted to this profile.
• Greater interest in villas with energy self-sufficiency (solar panels, home automation, A efficiency).

Taxation and legal management: keys to optimizing your investment

Investing in a luxury property requires a professional approach and expert advice. Some key aspects:

• Taxation of rent (Personal Income Tax or non-resident tax).
• VAT and ITP on purchase.
• Declaration of assets abroad if you reside outside of Spain.
• Contracts, insurance, tourist licenses.

Good advice helps reduce risks, optimize profitability, and avoid costly mistakes. Having a tax advisor specialized in international real estate investments is a strategic decision.

Additional benefits of owning a luxury home on the Costa Blanca

• Constant revaluation of the asset: Prices in premium areas have remained stable even during the crisis.
• Possibility of own use: holidays, getaways, second homes.
• Quality of life: health, climate, clean air, safety.
• Asset diversification: a tangible, profitable and enjoyable asset.
• Access to Golden Visa: for non-EU investors with purchases over €500,000.

An investment that is also a way of life

Owning a luxury home on the Costa Blanca isn't just a financial decision: it's a way to project your lifestyle, your vision, and your values. It combines profitability with enjoyment, security with beauty.

If you're thinking about taking that step, don't do it blindly. Let experienced experts guide you. At Luxus Real Estates, we know every corner of the coast and every nuance of the market. We can help you. invest in a property that meets your expectations and exceeds them.

Because a luxury home isn't just a place. It's an experience, a smart choice, and, above all, a home with a horizon.