The Best Rental Real Estate Markets In Europe (+Rental Yields)

Investing in some of the best rental real estate markets in Europe offers a lucrative opportunity for both seasoned and new investors.

With strong demand for rental properties and stable economic conditions in key cities, the European market is ripe for those seeking long-term returns.

Whether targeting the booming tech hub of Dublin or the emerging markets of Riga and Bucharest, Europe’s rental real estate provides a diverse range of opportunities.

By focusing on cities with the best rental yields, investors can maximize their return on investment while navigating a competitive market driven by factors such as tourism, expatriate demand, and local economic growth.

1. Dublin, Ireland – 7.76%

Why Dublin?

Dublin has long been a key player in the European real estate market, and its rental yields are among the highest on the continent. With a rental yield averaging around 7.76%, Dublin remains one of the best markets for real estate investors seeking high returns.

The city’s booming tech sector, led by companies like Google and Facebook, has created an influx of professionals, thereby increasing demand for rental properties and making it one of the best rental real estate markets in Europe.

Rental Yield Analysis

Dublin’s rental yield of 7.76% stands out as one of the highest in Europe, largely due to the city’s status as a global tech hub. Tech giants like Google, Facebook, and Amazon have their European headquarters in Dublin, attracting a large number of high-paid professionals.

This influx of workers has increased demand for both short- and long-term rentals, pushing up rental prices across the city.

While housing supply is tight, demand continues to grow, creating a landlord-friendly market where properties are rented out quickly, sometimes within days. The limited supply also means that landlords can charge premium rates, further boosting rental yields.

Additionally, the city’s education sector, with prestigious institutions like Trinity College Dublin, also ensures consistent rental demand from students, particularly in central areas.

As of 2025, the average monthly rent for a two-bedroom apartment in central Dublin ranges between €1,734 to €2,500, with the upper end of the market being more prevalent in neighborhoods like Ballsbridge, Rathmines, and Docklands.

Dublin 2 had the highest average rent at €2,470, followed by Dublin 4 at €2,345. Other areas such as Dublin 1, Dublin 6, and South County Dublin had average rents ranging from €2,097 to €2,217.

Conversely, West Dublin was the most affordable, with an average monthly rent of €1,734.

The relatively high rents compared to the cost of purchasing property, especially for those who bought property several years ago, have contributed significantly to the city’s above-average rental yield.

Economic Factors

The Irish economy has demonstrated resilience, with projections indicating a growth of 1.2% in 2024 and 3.6% in 2025.

Inflation has been easing, reaching 2.6% year-on-year as of 2025, the lowest rate since August 2021.

This strong economy, coupled with limited new housing developments, ensures high demand for rental properties, making Dublin a stable and lucrative market for real estate investment.

2. Istanbul, Turkey – 6.63%

Why Istanbul?

Istanbul has become an increasingly attractive market for rental real estate investors due to its unique position as a bridge between Europe and Asia, a robust tourism industry, and affordable property prices.

With rental yields averaging 6.63%, the city presents a great opportunity for those looking to enter the European property market at a lower price point.

Rental Yield Analysis

As of 2025, Istanbul’s gross rental yields on apartments range from 3.75% to 9.72%, with a city average of 6.63%.

This is slightly higher compared to the city average of less than 6% recorded in the past two years.

The city’s affordable property prices, especially when compared to other European cities, mean that investors can buy rental properties at a lower cost while still charging competitive rental rates.

The city’s rental market is boosted by a combination of tourism, expatriates, and local demand. Neighborhoods such as Beyoglu, Kadikoy, and Sisli are particularly popular with tourists and expatriates, who seek high-quality rentals in centrally located areas.

As of 2025, the average rent for a centrally located one-bedroom apartment ranges from €600 to €2,500 per month, depending on the neighborhood and proximity to attractions or business centers.

Property prices in Istanbul remain relatively low compared to European counterparts, making the city particularly attractive for investors looking to enter the market at a lower cost.

Additionally, the Turkish lira’s devaluation has made it more affordable for international investors to purchase real estate, which further boosts rental yields when rents are charged in euros or dollars.

Economic Factors

Turkey’s relatively young population and growing middle class ensure a steady demand for rental housing.

Additionally, Istanbul benefits from a constant stream of foreign investors, particularly from the Middle East, which has pushed property values up over the years.

Despite some economic volatility, Istanbul remains a promising market for investors who prioritize high rental yields.

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3. Riga, Latvia – 7.46%

Why Riga?

Riga, the capital of Latvia, is emerging as one of the best rental real estate markets in Eastern Europe.

With an average rental yield of 7.46%, the city offers excellent returns for investors, especially in the residential and short-term rental markets, making it one of the best rental real estate markets in Europe.

Rental Yield Analysis

A combination of low property prices and increasing demand for rental accommodation drives Riga’s rental yield of 7.46%.

Riga is attracting more foreign investment, particularly from Northern Europe and Russia, as well as expatriates moving to the city for work in the growing IT and tech sectors.

The city’s proximity to other major European hubs and relatively low cost of living make it an attractive location for professionals.

Rental demand in the city center, particularly in areas such as Old Town and Central Riga, is high.

As of 2025, the average rent for a one-bedroom apartment in the city center is around €600 to €1,200 per month, depending on the location and amenities.

The short-term rental market, driven by platforms like Airbnb, is also growing, especially as Riga continues to emerge as a popular destination for both business travelers and tourists.

The combination of affordable property prices and strong rental demand creates high yields, especially for investors who purchase apartments in centrally located areas.

Additionally, Riga’s favorable tax laws for property investors add to the city’s appeal.

Economic Factors

Latvia’s economy has been growing, and its capital city is benefiting from increased foreign investment.

The tourism sector, in particular, has seen a boom in recent years, which also drives demand for short-term rental properties, such as those listed on Airbnb.

The low cost of living and affordable property prices make Riga an attractive city for investors looking to maximize rental returns.

4. Bucharest, Romania – 6.46%

Why Bucharest?

Romania’s capital, Bucharest, offers high rental yields of approximately 6.46%, making it one of the most attractive markets in Eastern Europe.

The city’s affordable property prices, coupled with rising demand for rental housing, create an excellent opportunity for investors.

Rental Yield Analysis

Bucharest’s 6.46% yield is supported by its affordable property prices and high demand for rentals due to a growing economy.

The city has become a hotspot for expatriates and professionals working in the tech and finance sectors, further fueling the demand for rental properties.

In Bucharest, rental yields vary by district and property type. For instance, in the center of the city studio apartments in the Titan district have a gross rental yield of 9.02%, while one-bedroom apartments yield 8.47%.

Rental properties in Central Bucharest are particularly sought after, where rental prices for two-bedroom apartments range from €450 to €650 per month.

Areas such as Dorobanti and Herastrau are popular with expatriates and high-income professionals, pushing up demand for premium rentals.

The city’s growing student population also contributes to rental demand, particularly around universities like Bucharest Academy of Economic Studies.

What makes Bucharest especially appealing is the relatively low cost of purchasing property compared to other European capitals, allowing investors to enter the market at a lower price point while still enjoying robust rental demand and high yields.

Economic Factors

Bucharest’s economy has been expanding steadily, with a growing IT and technology sector attracting professionals from across Europe.

The city’s affordable cost of living, coupled with Romania’s EU membership, ensures consistent rental demand, especially among expatriates and young professionals.

5. Podgorica, Montenegro – 5.7%

Why Podgorica?

As Montenegro’s capital, Podgorica is gaining attention as a promising rental real estate market with yields averaging 5.7%.

The city offers a low cost of entry for real estate investors and steady rental demand due to its growing economy and tourism sector, which makes this city one of the best rental real estate markets in Europe.

Rental Yield Analysis

Podgorica’s 5.7% yield is a result of its position as an emerging real estate market with growing foreign interest.

As the capital of Montenegro, Podgorica benefits from economic growth and tourism, with an increasing number of international investors and tourists visiting the city.

Rental demand in Podgorica is driven by both expatriates and locals seeking long-term rentals, as well as tourists looking for short-term vacation stays.

The average price per square meter for new construction in Podgorica in 2025 is €1,760, reflecting an 11% increase compared to the 2024 average.

Rental demand in Podgorica is driven by both expatriates and locals seeking long-term accommodations.

As of 2025, the average monthly rent for a one-bedroom apartment in the city center is approximately €548.75, with prices ranging from €450 to €650. This results in a gross rental yield of about 5.7%.

Montenegro’s appeal as a real estate market has grown in recent years due to the country’s EU accession talks and NATO membership, both of which have encouraged foreign investment.

The strong rental yield reflects the growing interest from international buyers, particularly those looking for vacation rental properties in nearby coastal towns like Kotor and Budva, which also benefit from rising tourism numbers.

Economic Factors

Montenegro’s recent NATO membership and ongoing EU accession talks have attracted foreign investment to the country, which has boosted the real estate market.

Montenegro’s economy has been expanding, with a 6% growth in 2023, following annual expansions of 13% in 2021 and 6.4% in 2022, amidst the continued recovery in tourism.

Tourist arrivals surged by nearly 20% year-on-year to 2,613,306 visitors back in 2023.

Tourism, in particular, plays a major role in driving demand for short-term rental properties in Podgorica and other coastal cities like Kotor and Budva.

6. Lisbon, Portugal – 5.65%

Why Lisbon?

Lisbon continues to be one of Europe’s hottest real estate markets, offering strong rental yields of around 5.65%.

The city’s vibrant tourism industry, coupled with increasing foreign interest, has kept demand for rental properties high making one of the best rental real estate markets in Europe.

Rental Yield Analysis

Lisbon’s 5.65% yield is supported by its booming tourism industry, strong expatriate community, and the city’s attractiveness as a digital nomad hub.

The city’s Golden Visa program, which offers residency to non-EU citizens who invest in real estate, has also driven up foreign investment.

The short-term rental market, especially through Airbnb, has flourished in Lisbon. Rental demand is high, particularly in central neighborhoods like Baixa, Alfama, and Chiado, where tourists and expatriates seek accommodation.

The average rent for a two-bedroom apartment in central Lisbon ranges from €1,200 to €2,500 per month, depending on the property’s location and proximity to tourist attractions.

Property prices in Lisbon have been rising in recent years due to increased foreign investment, but rental demand continues to outpace supply, maintaining strong yields for property owners

Economic Factors

Portugal’s Golden Visa program has brought a surge of foreign investment into Lisbon’s real estate market.

Additionally, the city’s burgeoning tech and startup sectors have attracted professionals, creating consistent demand for rental properties.

7. London, UK – 6.73%

Why London?

London remains one of the most sought-after real estate markets in Europe, offering solid rental yields of 6.73% despite the city’s high property prices.

The combination of its status as a global financial hub and a tourist hotspot keeps demand for rental properties consistently high.

Rental Yield Analysis

London’s rental market offers a 6.73% yield, which is relatively strong considering the city’s high property prices.

In London, rental yields vary by area, with some boroughs offering higher returns. For instance, Barking and Dagenham currently offer rental yields of 6.4%, making it one of the most profitable areas in the city.

While London is one of the most expensive cities in Europe to purchase real estate, its status as a global financial hub, tourism destination, and cultural center ensures continuous rental demand, making it a stable investment market.

Average rents in London have been rising. As of 2025, the average rent in London reached £2,694 per calendar month (pcm), up from £2,627 pcm in the previous year.

This is more than double the average cost of rent outside of London, which surged to a 19th consecutive quarterly record high of £1,344 pcm.

Central boroughs like Kensington and Chelsea command some of the highest rental costs, with average rents around £3,435 per month.

However, these premium areas might not yield the highest percentages due to high initial purchase prices. Investors seeking better yields can find more affordable options in up-and-coming neighborhoods like Barking and Dagenham, where property prices are lower but rental demand remains strong.

Investors looking for better yields can find more affordable options in up-and-coming neighborhoods like Hackney, Peckham, or Walthamstow, where property prices are lower, but rental demand is still strong due to the city’s extensive public transport system and younger population.

The strength of London’s real estate market is underpinned by its role as a top destination for expatriates, international students, and professionals.

Even post-Brexit, the city’s rental market remains resilient, bolstered by continued demand from wealthy overseas buyers and corporate renters.

Short-term rentals through platforms like Airbnb are particularly lucrative in central districts, where tourism fuels high occupancy rates.

Economic Factors

London’s real estate market is supported by its global importance in finance, education, and tourism. Even with Brexit uncertainties, the capital remains a prime location for both international investors and expatriates.

Rental demand is also bolstered by the city’s many universities, drawing in thousands of students each year, and a strong employment market that attracts both domestic and international professionals.

8. Brussels, Belgium – 4.20%

Why Brussels?

Brussels is an ideal investment destination for those looking to tap into the European Union’s capital.

Its average rental yield of 4.20% is impressive given the city’s political and economic significance, which attracts a diverse population of professionals and diplomats.

Rental Yield Analysis

Brussels offers an attractive rental yield of 4.20%, driven by its position as the de facto capital of the European Union.

The city’s international institutions, including the European Parliament, European Commission, and NATO headquarters, generate a consistent demand for rental properties, especially among diplomats, expatriates, and professionals.

In Brussels, rental yields vary depending on property type and location.

For instance, semi-detached houses had the highest average rent at €1,866 per month in 2025, while studios were the most affordable, averaging €800 per month.

The city’s international institutions, including the European Parliament, European Commission, and NATO headquarters, generate consistent demand for rental properties, especially among diplomats, expatriates, and professionals.

Key areas such as Ixelles, Etterbeek, and Saint-Gilles are particularly popular among expatriates, offering both long-term and short-term rental opportunities.

In these neighborhoods, rents for a one-bedroom apartment range between €1,200 to €1,800 per month, while property prices remain moderate compared to other major European cities.

The high demand for rental properties from international civil servants ensures low vacancy rates, making Brussels one of the more stable rental markets in Europe.

Another factor contributing to Brussels’ favorable yields is the city’s strategic location at the heart of Europe, making it a hub for business and politics.

Additionally, the presence of numerous multinational corporations ensures that professionals and diplomats who work in the city prefer renting over purchasing property due to the transient nature of their assignments. This dynamic results in consistent rental demand and solid returns for investors.

Economic Factors

As the headquarters of major European institutions, Brussels has a stable and growing population of diplomats, civil servants, and expatriates, all of whom require high-quality rental properties.

Additionally, Brussels’ well-developed infrastructure and international connectivity ensure it remains a popular destination for business travel, further boosting the rental market.

9. Warsaw, Poland – 6.03%

Why Warsaw?

Warsaw has emerged as one of the most dynamic cities in Eastern Europe, offering attractive rental yields of 5.51%.

As Poland’s capital, Warsaw is a major hub for business, finance, and education, drawing in both domestic and international professionals, making one of the best rental real estate markets in Europe.

Rental Yield Analysis

Warsaw’s rental market continues to offer impressive yields of 6.03%, fueled by its role as an economic and business center in Eastern Europe.

As of 2025, the average gross rental yield in Poland stands at 6.03%, up from 5.75% in 2024.

Poland’s capital has attracted numerous international companies and organizations, contributing to rising demand for rental properties.

Foreign direct investment (FDI) in Warsaw’s tech and finance sectors has boosted the city’s job market, driving up demand for both short-term and long-term rentals.

Areas like Śródmieście and Wola have seen increasing interest from expatriates, young professionals, and students, all of whom are seeking affordable yet modern housing.

In these districts, rental prices for a one-bedroom apartment typically range from €675 to €1,100 per month, with relatively lower property acquisition costs compared to Western European capitals.

Poland’s low property taxes and investor-friendly laws are additional advantages, making Warsaw one of the more appealing markets for foreign investors.

The city’s rapid economic development, combined with strong demand from its growing expatriate population, has positioned Warsaw as a promising investment destination with stable rental returns.

Economic Factors

Warsaw’s economic growth has been fueled by its role as a major financial and business hub in Eastern Europe. The city is home to many multinational corporations and startups, creating a steady demand for rental housing.

Additionally, Poland’s low property taxes and business-friendly environment have attracted foreign investment, further boosting the real estate market.

10. Vilnius, Lithuania – 5.47%

Why Vilnius?

Vilnius, Lithuania’s capital, offers promising rental yields of 5.47%, making it an attractive market for real estate investors.

The city’s rapid development, tech industry growth, and increasing popularity among expatriates have contributed to the rising demand for rental properties.

Rental Yield Analysis

Vilnius, with a rental yield of 5.47%, has established itself as a strong player in the Baltic real estate market.

Lithuania’s capital has become a hub for startups and technology firms, attracting both local and international talent, which in turn boosts demand for rental properties.

Rental prices in Vilnius remain affordable by European standards, with rents for centrally located apartments in districts like Old Town or Naujamiestis ranging between €700 and €1,200 per month.

Despite relatively low property acquisition costs, the growing demand for quality rental accommodations ensures a steady stream of rental income for investors.

The influx of young professionals and expatriates in the technology and finance sectors has driven up demand for rental housing, particularly in the city center.

Additionally, Vilnius’ reputation as a center for higher education means that student housing is also a profitable sector, contributing to its robust rental yield.

Economic Factors

Vilnius has positioned itself as a tech hub in the Baltics, attracting a young and dynamic population. Its growing economy, driven by sectors such as IT and fintech, has bolstered the real estate market.

Additionally, Lithuania’s EU membership ensures stability and encourages foreign investment in the real estate sector.

Top 10 European Cities by Rental Yield

1. Dublin: 7.33% – High demand from tech professionals, limited housing supply.
   
   
2. Riga: 7.46% – Affordable property prices and growing rental demand.
   
   
3. London: 6.73% – Stable demand from expatriates, professionals, and tourists.
   
   
4. Istanbul: 6.63% – Low property prices, strong tourist and expatriate demand.
   
   
5. Bucharest: 6.46% – Urbanization and affordable property prices create strong rental returns.
   
   
6. Warsaw: 6.03% – Growing business hub with strong rental demand.
   
   
7. Podgorica: 5.7% – Emerging market with rising foreign investment.
   
   
8. Lisbon: 5.65% – Booming tourism and strong demand for both short- and long-term rentals.
   
   
9. Vilnius: 5.47% – Tech industry growth and increasing expatriate population.
   
   
10. Brussels: 4.20% – EU’s capital, consistent demand from diplomats and expatriates.
    

Worst 10 European Countries by Rental Yield

While these markets may still be attractive for other reasons, they have lower average rental yields due to high property prices, stagnant rental demand, or unfavorable economic conditions:

1. Monaco: 1.7% – Extremely high property prices but limited rental market demand.
   
   
2. Switzerland (Zurich): 2.0% – Very high property costs and low rental yields due to the stability of the Swiss franc.
   
   
3. France (Paris): 2.5% – High property prices, strict rental regulations, and low yields.
   
   
4. Italy (Rome): 2.6% – Aging housing stock and slow property market.
   
   
5. Norway (Oslo): 2.7% – High living costs but low rental yields.
   
   
6. Germany (Berlin): 3.0% – Rent caps and other legal restrictions limit returns.
   
   
7. Denmark (Copenhagen): 3.2% – High property prices and rental controls.
   
   
8. Finland (Helsinki): 3.3% – High costs of property ownership with moderate rental demand.
   
   
9. Netherlands (Amsterdam): 3.4% – Strong tourism but rental price controls reduce yields.
   
   
10. Austria (Vienna): 3.5% – High property prices but moderate demand due to rent control regulations.
    
    

Actionable Insights for Investing in European Rental Real Estate Markets

Based on the analysis of the top European cities by rental yield, it’s clear that several markets present excellent opportunities for investors looking to maximize their return on investment through some of the best rental real estate markets in Europe.

Below are some actionable insights for real estate investors considering these markets:

1. Look for Growth Potential in Emerging Markets

Cities like Bucharest, Riga, and Podgorica offer investors the chance to enter markets where property prices are still relatively low but rental yields are high.

These cities benefit from rapid urbanization and economic growth, making them attractive for both long-term and short-term rental strategies.

• Example: In Bucharest, rental yields of 6.36% are supported by a growing population and an emerging tech sector. Property prices are still accessible, offering potential for both capital appreciation and consistent rental income.

Action: Consider these markets if you’re looking to capitalize on growth in regions where property prices may rise in the future.

2. Leverage Tourism in Key Cities

Cities like Lisbon, Istanbul, and London benefit heavily from tourism, making them prime markets for short-term rental platforms like Airbnb.

These cities attract a mix of tourists, business travelers, and expatriates, ensuring steady rental demand throughout the year.

• Example: Lisbon’s tourism-driven economy and a short-term rental-friendly market contribute to its high yields of 5.65%. The average Airbnb listing in central Lisbon generates significantly higher returns compared to long-term rentals.

Action: For those interested in short-term rental investments, focus on cities with strong tourism sectors and flexible short-term rental regulations.

3. Capitalize on Business and Expat Demand

Cities like Brussels, London, and Warsaw are key business hubs, drawing in expatriates and professionals who prefer renting over buying.

These cities offer stable long-term rental markets, particularly in areas near financial districts or major international institutions.

• Example: Brussels benefits from being the de facto capital of the EU, with strong demand for rentals from diplomats, civil servants, and business professionals. Rental yields of 5.54% are driven by high demand from expatriates who require long-term housing.

Action: Consider investing in properties located near international organizations, business districts, and universities, where rental demand remains consistently strong.

4. Explore Alternative Investment Strategies

In markets like Dublin and London, where property prices are high, you can explore alternative strategies like buying smaller units (studio apartments) or investing in student accommodation and shared housing.

These types of properties offer higher yields while maintaining a lower cost of entry compared to full-sized residential properties.

• Example: In London, investing in a studio apartment near universities or tech hubs can yield strong returns, with average rental prices ranging from £1,500 to £2,500 per month for compact units in prime locations.

Action: Diversify your portfolio by considering niche property types such as student housing, serviced apartments, or co-living spaces, particularly in high-demand areas.

5. Pay Attention to Legal and Regulatory Frameworks

Understanding the legal and regulatory environment is crucial when investing in European rental markets.

Some cities, like Berlin and Amsterdam, have implemented rental price controls and Airbnb restrictions, which can limit potential returns.

• Example: Berlin has strict rent control measures in place, which caps rental price increases, limiting potential profits for landlords. While the market may still be attractive for capital appreciation, rental yields are typically lower.

Action: Before investing, research local rental laws, property taxes, and regulations on short-term rentals to ensure compliance and maximize your investment’s potential.

6. Consider the Impact of Economic and Political Stability

Countries like Montenegro and Turkey offer high rental yields, but investors should be aware of the potential risks associated with political instability or economic volatility.

Currency fluctuations, for example, can impact your return on investment if the local currency devalues against the euro or dollar.

• Example: While Istanbul offers impressive rental yields of 6.63%, Turkey’s economic instability and inflation rates pose risks to long-term investments. Investors should take these factors into account when calculating potential returns.

Action: For risk-averse investors, focus on stable economies like Ireland or Belgium, where both rental yields and political stability offer a safer investment environment.