What is better: selling or renting a home?

Deciding between selling or renting a property is one of the most strategic decisions a homeowner can make. In Spain, this dilemma has intensified in recent years due to real estate market fluctuations, government policies, and changing personal and financial needs.

Below, we analyze in detail the advantages and disadvantages of each option, considering the current context of the Spanish market.

Rent or sell, that is the question

The decision between selling or renting a home depends on multiple factors, both personal and the economic environment and the real estate market. In a context of rising prices and high demand, many homeowners face this dilemma.

Current real estate market in Spain

In 2025, the Spanish real estate market is set to experience a significant boom. According to data from the National Institute of Statistics (INE), more than 350,000 sales were registered in the first half of 2025, a 191% increase compared to the previous period.

This increase has been driven by sustained demand in cities like Madrid, Barcelona, and Malaga, where housing prices have risen significantly.

On the other hand, the rental market is also showing signs of strength. The average rental price in Spain rose by 14% in 2024, reaching €13.29/m² per month. This increase has been especially pronounced in urban areas with high demand.

It all depends on your property

The decision to sell or rent is not universal; it depends largely on the specific characteristics of the property.

Location

Location is one of the most determining factors. Properties located in central or tourist areas tend to be in high demand for both sale and rental. For example, in cities like Madrid, Barcelona, and Malaga, the demand for housing is constant, which can make renting an attractive option for generating passive income.

Conservation status

A home in good condition, with recent renovations or modern features, may be easier to sell at a good price. However, if the property requires renovations, renting may be a more viable option, as it allows you to generate income while planning the necessary improvements.

Property type

Luxury properties, such as villas on the Costa Brava or penthouses in central Madrid, often have a smaller buyer market. In these cases, renting the property long-term or as a vacation rental can be a stable source of income.

Your projection and your desires

Beyond the physical characteristics of the property, it's essential to consider your personal and financial goals.

Need for liquidity

If you need a significant amount of money for other projects or investments, selling the property may be the most appropriate option. Selling provides a considerable amount of immediate capital.

Generating passive income

If your goal is to generate regular income without having to part with the asset, renting is a viable option. Plus, maintaining the property allows you to benefit from potential future appreciation.

Long-term planning

If you think the property's value will increase over time, holding and renting it out can be a smart strategy. This allows you to take advantage of the rental income while you wait for the property's value to appreciate.

Real estate leasing: an intermediate alternative

Real estate leasing is a modality that combines elements of sale and rental. It works as a lease with option to purchase, where the owner grants the use of the property to a tenant for a specified period, usually between 3 and 5 years, and the tenant has the option to purchase the property at the end of the contract.

How it works

1. Initial agreement: The duration of the contract, the monthly rental price, and the conditions for future purchase are established.
   
2. Monthly payment: Part of the rent paid can be used as a down payment on the purchase price, accumulating a value that is discounted if the tenant decides to purchase the property.
   
3. Purchase optionAt the end of the contract, the tenant decides whether to purchase the home for the previously agreed price.
   
4. Benefits for the owner: Generates immediate income while maintaining the possibility of selling the property in the future.
   
5. Benefits for the tenant: It allows you to access housing with a lower initial outlay and the possibility of purchasing it later.
   

This model is especially useful for properties with high demand or when flexibility is sought between generating income and preserving the asset.

Advantages and disadvantages of selling or renting

Below are the main advantages and disadvantages of each option:

Sell

Advantages:

• Immediate liquidity.
  
• Elimination of management and maintenance responsibilities.
  
• Possibility of taking advantage of high prices in the market.
  

Disadvantages:

• Loss of asset.
  
• Possible regret if prices continue to rise.
  
• Tax implications arising from capital gains.
  

Rent

Advantages:

• Generation of regular income.
  
• Heritage conservation and the possibility of future revaluation.
  
• Tax benefits in certain cases.
  

Disadvantages:

• Ongoing tenant management and maintenance.
  
• Risk of default or deterioration of the property.
  
• Possible additional costs for repairs or insurance.
  

Luxury Property Market: When to Rent and When to Sell

The luxury property market in Spain requires a specialized strategy. It's not just about high prices, but also about considering the international demand, exclusivity and services associated with ownership.

Characteristics of the luxury segment

• Design and architecture: High-end materials, custom finishes, integrated technology, and energy efficiency are key factors in the assessment.
  
• Services and amenities: Private pool, gym, spa, spacious gardens, advanced security and multi-garage are common in this category.
  
• International demandForeign buyers are looking for luxury properties for temporary residence, investment, or vacation rentals, ensuring a stable income.
  

Sales and rental strategies

• Sell: It is suitable when the property has unique characteristics, demand is at its peak, and a significant profit can be made in a high-end market.
  
• RentIdeal if you're looking for recurring income, especially through vacation rentals or long-term rentals to high-net-worth clients. Maintaining the property also allows you to benefit from long-term appreciation.
  

For optimal management of this type of property, it is necessary to have experts in real estate consulting is essential.

They will provide you with market analysis, marketing strategies, and international client management, ensuring decisions based on accurate and up-to-date information.