Rental Yield by Neighborhood in Palma de Mallorca: The Complete Investor Ranking (2026)

If you're looking to buy a flat in Palma de Mallorca as an investment, the question isn't just "which neighborhood do I like?" but "which neighborhood gives me the best return?". We've calculated the gross rental yield for 36 neighborhoods in Palma using market data, so you can compare at a glance where rental income best offsets the purchase price — and where you're mainly paying for prestige and future appreciation.

How We Calculated the Yield

Gross yield is the quickest indicator for comparing neighborhoods against each other: it relates what it costs to buy a home with what that same home would generate in rent if let out today. The formula is simple:

The gross yield across the Palma sample averages 4.28%, with a notable gap between the highest-yielding neighborhood (Zona Colegios, 6.02%) and the lowest (Son Vida, 2.56%) — a difference of more than 3 percentage points that can completely change the viability of an investment.

Full Ranking: Gross Yield by Neighborhood in Palma

Figures refer to a typical 65 m² home. Indicative calculation based on market data (Idealista, Fotocasa and comparable sources). This does not constitute financial advice.

The Highest Gross-Yield Neighborhoods in Palma

The top group —Zona Colegios, Plaza de Toros, La Soledad, Pere Garau and Can Capiscol— shares a clear pattern: these are inland Palma areas, with purchase prices below the city average, high residential density and strong demand for long-term rentals, from both local residents and workers not looking for a coastal address. In these neighborhoods, buying is relatively affordable and letting is relatively fast — two conditions that together produce the highest gross yield in the city, above 5.5%.

These are, in general, neighborhoods less oriented toward tourism and more toward stable residents, which also means lower tenant turnover and less exposure to seasonality — a factor worth weighing if the goal is a long-term rental with predictable cash flow.

The Premium Neighborhoods: Lower Yield, a Different Investment Logic

At the other end of the ranking are Son Vida, Portixol - Molinar, Cort, El Terreno and Paseo Marítimo, all below 3.3% gross yield. This doesn't mean they're poor areas to invest in: it means the return no longer comes mainly from rental income, but from medium-to-long-term capital appreciation and the prestige of the location, which sustains buyer demand even with rents that are comparatively low relative to price.

Son Vida, for example, is Palma's most prestigious residential area, with a buyer profile that prioritizes a home for personal use or long-term wealth investment over monthly cash flow. Cort and La Llotja, in the old town, attract buyers mainly for their architectural character and their potential for high-end tourist rentals — where the gross yield calculated on long-term rental doesn't reflect the property's true income potential if it holds an ETV (holiday rental) license.

From Gross Yield to Real Return: What This Ranking Doesn't Tell You

This ranking is a starting point, not the final answer. Gross yield doesn't account for taxes (IBI property tax, income tax), community fees, insurance, maintenance, possible vacancy periods between tenants, or mortgage costs if financing is used. Two properties with the same gross yield can have very different net yields and monthly cash flow depending on their condition, financing and management.

That's why, before deciding which neighborhood to buy in, it's worth translating the area's gross yield into a net-yield analysis of the specific property you're considering: real initial investment (including transfer tax, notary and administrative fees), financing structure, recurring expenses and a multi-year cash flow projection.

Frequently Asked Questions