Can I Pay Off My Mortgage with a Holiday Rental on the Costa Blanca?

It’s a common question we’re asked at Right Priced Real Estate.

Not “Will it rent?”
Not “Is it a good area?”

But very specifically:

Will the rental income cover, or even clear, my mortgage?

The honest answer is:
It can. But only if the numbers are approached properly.

Start With the Mortgage (Not the Dream)

Before we even look at rental income, we look at:

• Purchase price

• Deposit size

• Interest rate

• Mortgage term

For example:

If you buy at €220,000 with a 30% deposit, you’re borrowing €154,000.
At current Spanish rates, repayments might land around €650–€800 per month depending on structure.

That’s €7,800–€9,600 per year.

Now add:

• Community fees (€800–€1,500 annually typical in pool developments)

• SUMA (local property tax)

• Insurance

• Utilities

• Maintenance reserve

Your property may realistically need to generate €11,000–€14,000 per year net to comfortably carry itself.

What Does a Costa Blanca Holiday Rental Actually Earn?

Let’s talk realistic ranges for well-located, well-presented properties:

Coastal apartments (walkable to beach):
€15,000–€22,000 gross per year is achievable.

Modern townhouses:
€12,000–€18,000 gross depending on location and outdoor space.

Villas with private pools:
€18,000–€30,000+ gross if positioned correctly.

But those are gross figures.

And gross is not what pays your mortgage.

The Costs Most Buyers Underestimate

Holiday rentals are not passive.

Expect:

• 20–25% management if fully handled

• Cleaning and laundry after each stay

• Platform fees (Airbnb / Booking.com etc.)

• Utilities (AC runs constantly in summer)

• General wear and tear

• Spanish tax on rental profits

• Tourist licence compliance

Strip 30–35% off gross income to get closer to reality.

So:

€20,000 gross
Minus 30% costs
= €14,000 net (before mortgage)

Now compare that to your annual mortgage + running costs.

That’s when the picture becomes clear.

Where It Works (And Where It Doesn’t)

The Costa Blanca has strong rental demand. But it isn’t automatic.

It works best when:

• The property is walking distance to beach, restaurants or a commercial centre.

• There is outside space (terrace, solarium, or private pool).

• Air conditioning and fibre internet are installed.

• Presentation is modern — not 2006 beige.

• The price paid makes sense.

It struggles when:

• The property is inland with no walkability.

• It’s heavily overlooked with no privacy.

• It relies purely on “summer tourists”.

• It was bought at peak pricing with minimal deposit.

The location matters, but so does the purchase price.

Overpay, and the rental will always feel tight. Buy correctly, and the numbers breathe.

Can It Fully Clear the Mortgage?

In some cases, yes.

Particularly when:

• Deposit is 30–40%+

• Purchase price is competitive

• The property suits the rental market

• The owner is realistic on pricing

More commonly, what clients achieve is:

• Mortgage largely covered

• Property self-sustaining

• Personal use during quieter months

• Long-term capital growth

And that combination is often the real objective.

The Professional View

At Right Priced Real Estate, when someone says:

“The rental will cover it.”

We respond with:

“Let’s run the numbers properly.”

Because holiday rental income is strong on the Costa Blanca but only when:

• The property is right.

• The purchase price is right.

• The expectations are right.

If you’re buying with the intention of mortgage coverage, the deal must be assessed before reservation, not after completion.

The Costa Blanca can absolutely work as a hybrid investment. But success here isn’t luck!