There are two types of profitability in the Andorran rental market. The one that appears in the promoters' presentations and the one that remains in the investor's bank account twelve months later. The difference between the two usually ranges between two and four percentage points, and that margin is exactly what separates a profitable investment from one that only seems so on paper.
What follows is the analysis by parish with the factors that the portals do not include in their calculations.
Gross profitability vs. net profitability: the calculation that no one makes before buying
Gross profitability is the data that circulates in investment advertisements and presentations. It is calculated by dividing the annual income by the purchase price. It is a clean number, easy to communicate and almost always misleading.
Net profitability is what really matters. It is obtained by subtracting all the real costs of the operation from the gross income:
- Community expensesannual
- Vacancy periods between tenants (usually one to two months a year in the residential market)
- Maintenance costs and small repairs (between 0.5% and 1% of the value of the property per year as an indicative reference)
- Rental management if delegated to a company
- Taxation of income from real estate capital in the country of residence of the investor
A property that advertises a gross profitability of 5% in Andorra may remain at 2.8% or 3.2% net once these factors are applied. That is the real number on which to make the decision.
Analysis by parish: where the numbers work and why
Escaldes-Engordany
The parish with the highest density of demand for long-term residential rentals. The proximity to the main commercial hub and the connectivity with Andorra la Vella generate a constant and stable demand that minimizes vacancy periods.
Market profile:tenants with a stable employment contract, low turnover, contracts of one to three years. Demand consistently exceeds supply in two- and three-bedroom typologies.
Indicative profitability:gross between 6% and 5.5% depending on the type and condition of the property. Net between 4% and 4.5% discounting real factors.
What does not appear in the advertisement:Community fees in Escaldes buildings with shared facilities (swimming pool, gym, concierge) can exceed €300 per month in some developments, which significantly erodes the net margin in mid-priced properties.
→ Suitable for the investor who prioritizes stability and low management over maximizing gross return. Seeproperties available in Escaldes-Engordany.
Andorra la Vella
The most liquid market in the Principality but also the most competitive in purchase price. The higher values per square meter compress the gross profitability compared to other parishes, although the rental demand is practically permanent.
Market profile:high concentration of workers in the sector. Services, commerce and administration. Stable demand throughout the year without dependence on the season.
Indicative profitability:gross between 5% and 5.5% depending on the exact area within the parish. Net between 4% and 3.5%.
What does not appear in the advertisement:The high entry price reduces the profitability margin but better protects capital in market correction scenarios. The liquidity of the asset at the time of sale is higher than that of any other parish in the Principality.
→ Indicated for the investor who prioritizes capital preservation and asset liquidity over maximum performance. Seeproperties available in Andorra la Vella.
La Massana
The parish that most frequently appears in investment presentations with attractive returns, and also the one that requires the most nuances before believing those numbers.
Market profile:divided between long-term residential rentals in the urban center and vacation or seasonal rentals in the Pal and Arinsal areas. Two markets with completely different logics within the same parish.
Indicative profitability in urban centre:gross between 4.5% and 5.5%. Net between 3% and 4% with standard vacancy of one month per year.
Indicative profitability in mountain areas (Pal/Arinsal):advertised gross of up to 7% on vacation rentals. Real net between 4.5% and 5% after discounting periods without occupancy out of season, vacation management costs and maintenance of properties with gardens or outdoor facilities.
What does not appear in the advertisement:Vacation rentals in La Massana have two peaks of demand (ski season and summer hiking) and valleys of low occupancy in spring and autumn that promoters' calculations rarely include in their annual projection.
→ Indicated for the active investor willing to manage seasonality. Not recommended for those looking for passive income without management. Seeproperties available in La Massana.
Canillo
The parish with the greatest potential for announced gross profitability and the greatest variability in actual net profitability. Proximity to Grandvalira is the main selling point, and it is a valid argument — but only for a very specific investor profile.
Market profile:concentrated in ski season vacation rentals with optional extension to the mountain summer. Long-term residential rental exists but is secondary to vacation rentals.
Indicative profitability:advertised gross of up to 8% in the best cases. Real net between 3.5% and 5% in properties well located with respect to the slopes, with professional vacation management and high occupancy in season.
What does not appear in the advertisement:Canillo properties that are not in the El Tarter or Soldeu areas have vacation returns that are significantly lower than those announced in the presentations. The difference in location within the parish can mean two percentage points of net profitability.
→ Indicated exclusively for investors with experience in vacation management or willing to delegate to a specialized company. Margin is quickly destroyed without active occupancy management. Seeproperties available in Canillo.
Encamp
The most undervalued parish in the rental profitability analysis. Purchase prices are the most contained in parishes with good connectivity, and demand for long-term residential rentals is stable thanks to its central position between Andorra la Vella and the mountain areas.
Market profile:workers in the logistics, technology and service sectors who prioritize rental price over central location. Long-term contracts, low turnover.
Indicative profitability:gross between 5% and 6.5%. Net between 4.5% and 5% — the highest net range in the Principality for long-term residential rentals.
What does not appear in the advertisement:the lower liquidity of the asset at the time of selling compared to Escaldes or Andorra la Vella. The investor who enters Encamp will obtain a better annual return but will take longer to find a buyer when he decides to leave.
→ Suitable for the investor who maximizes annual returns and has a long investment horizon. Seeproperties available in Encamp.
Sant Julià de Lòria and Ordino
Two parishes with lower volume rental markets and specific characteristics that make them suitable for very specific profiles.
Sant Julia de Lòria:rental demand linked mainly to proximity to Spain. Purchase prices contained, but rental demand is more sensitive to cross-border economic variations. Seeproperties available in Sant Julià de Lòria.
Ordino:Quiet residential market with a lot of demand for family profiles and luxury quality of life. Moderate returns, high prices but with assets that maintain their value well over time. Seeproperties available in Ordino.
The table that nobody publishes: comparative profitability by parish
| Parish | Rent. indicative gross | Rent. indicative net | Investor profile |
| Escaldes-Engordany | 6% – 5.5% | 4% – 4.5% | Good Profitability / Stability / Greater Investment |
| Andorra la Vella | 5% – 5.5% | 3.5% – 4% | Capital Preservation / Safe Investment |
| La Massana (core) | 4.5% – 5.5% | 3% – 4% | Residential Mixed |
| La Massana (mountain) | Up to 7% gross | 4% – 5.5% | Active vacation investor |
| Canillo | Up to 8% gross | 3.5% – 5% | Vacation with management |
| Encamp | 5% – 6.5% | 4.5% – 5% | Maximum performance / long term / Growing market / Lower prices. |
| Sant Julia de Lòria | 4% – 5% | 3% – 4% | Cross-border profile / Tranquility / More Local Profile |
| Ordino | 5% – 5.5% | 3.8% – 4% | Quality of life/family |
Guidance data prepared from transaction statistics of the National Institute of Habitatge of Andorraand observed market prices. They do not constitute a guarantee of future profitability.
The three warning signs that indicate that an announced profitability is not real
1. The calculation does not include vacancy.Any profitability projection that assumes 100% occupancy during the twelve months of the year does not reflect the real market. In residential rentals, one to two months of vacancy per year is the standard reference. In vacations, the periods without occupancy are significantly greater out of season.
2. Community expenses are not broken down.In properties with shared facilities, community expenses can represent between 15% and 25% of the annual gross income. If the projection does not explicitly include them, the number is incomplete.
3. The purchase price used in the calculation is the catalog price, not the closing price.Operations in Andorra frequently close below the published price, especially in properties with more than six months on the market. Using the list price as the basis of the calculation overestimates the real profitability that the buyer who negotiates well will obtain.
How to move forward with an informed investment
The real net profitability of a specific property depends on factors that do not appear on any portal: the technical condition of the property, the history of the community of owners, the rental demand profile on that specific street and the real price at which the operation can be closed.
Sharing the available investment budget, the parish of interest and the profitability profile sought - stable residential, active vacation or mixed -, the team of thepurchasing servicefilters the market and presents only options with net profitability calculated on real data, not on catalog projections.
Last updated: 30 July 2026
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