Rental profitability in Andorra by parish: gross vs net
What you will see in this article
There are two types of rental yield in Andorra. The one that appears in developers' 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 precisely what separates a profitable investment from one that only seems so on paper.
The following is the analysis of rental profitability in Andorra by area, with the factors that portals do not include in their calculations.
Gross yield vs net yield: the calculation nobody makes before buying
Gross rental yield is the figure that circulates in advertisements and investment presentations. It is calculated by dividing the annual rent by the purchase price. It is a clean number, easy to communicate, and almost always misleading.
Net rental yield is what really matters. It is obtained by subtracting all the actual costs of the transaction from the gross income:
- Service charges annuals
- Void periods between tenants (usually one to two months a year in the residential market)
- Maintenance costs and minor repairs (between 0.5% and 1% of the property’s value per year, as a rough guide)
- Rental management if delegated to a company
- Taxation of income from real estate capital in the investor's country of residence
The data that must guide the decision: A property advertised as offering a gross yield of 5% in Andorra may end up yielding a net return of 2.8% or 3.2% once these factors have been taken into account. That is the actual figure on which to base your decision.
For a reliable reference on the parameters of the Andorran real estate market, the National Housing Institute (INH) published up-to-date official price and rental statistics.
Escaldes-Engordany: stability and constant demand
The parish with the highest demand density for long-term residential rentals in Andorra. The proximity to the main commercial hub and the connectivity with Andorra la Vella generate a constant and stable demand that minimises void periods.
Indicative profitability in Escaldes-Engordany
- Bruta: between 5.5% and 6%, depending on the type and condition of the property
- Net: between 4% and 4.5%, allowing for real factors
What doesn't appear in the advert: service charges in buildings in Escaldes with shared facilities (swimming pool, gym, concierge) can exceed €300 a month in some developments, which significantly erodes the net margin on mid-market properties.
Suitable for the investor who prioritises stability and low management over maximising gross yield.
→ View available properties in Escaldes-Engordany
Andorra la Vella: the most liquid market in the Principality
The most liquid market in the Principality but also the most competitive in terms of purchase price. The highest values per square metre compress gross rental yields compared to other parishes, although rental demand is virtually constant.
Indicative rental yield in Andorra la Vella
- Bruta: between 5% and 5.5%, depending on the exact location within the parish
- Net: between 3.5% and 4%
What doesn't appear in the advert: The high entry price reduces the profit margin but better protects capital in market correction scenarios. The asset's liquidity at the time of sale is higher than that of any other parish in the Principality.
Suitable for the investor who prioritises capital preservation and asset liquidity over maximum yield.
→ View available properties in Andorra la Vella
La Massana: two markets within the same parish
The parish that most frequently appears in investment presentations with attractive rental yields in Andorra, and also the one that requires the most nuances before believing those numbers.
Profitability in the urban centre of La Massana
- Bruta: between 4.5% and 5.5%
- Net: between 3% and 4%, with a standard vacancy of one month per year
Profitability in mountain area (Pal / Arinsal)
- Advertised gross: up to 7% available for holiday let
- Truth be told: between 4.5% and 5%, excluding periods of vacancy during the off-season, holiday management costs and maintenance costs
What doesn't appear in the advert: holiday accommodation in La Massana has two peak demand periods (ski season and summer hiking) and low-occupancy troughs in spring and autumn that developers' calculations rarely include in their annual projection.
Suitable for the active investor willing to manage seasonality. Not recommended for those seeking passive income without management.
→ View available properties in La Massana
Canillo: maximum gross yield, maximum net variability
The parish with the highest advertised gross rental yield potential and greatest variability in actual net yield. Proximity to Grandvalira is the main selling point — valid only for a very specific investor profile.
Indicative rental yield in Canillo
- Advertised gross: up to 8% in the best-case scenario
- Truth be told: between 3.5% and 5% for well-located properties with professional holiday management
What doesn't appear in the advert: Canillo properties that are not in the El Tarter or Soldeu areas have significantly lower holiday rental yields. The difference in location within the parish can account for two percentage points of net yield.
Suitable exclusively for the investor with experience in holiday rental management or willing to delegate to a specialised company.
→ View available properties in Canillo
Encamp: the highest net yield in the Principality
The most underrated parish for rental yield analysis in Andorra. Purchase prices are the most restrained among parishes with good connectivity, and demand for long-term residential rentals is stable.
Indicative rental yield in Encamp
- Bruta: between 5% and 6.5%
- Net: between 4.5% and 5% — the highest net range in the Principality for long-term residential lettings
What doesn't appear in the advert: the lower liquidity of the asset when selling compared to Escaldes or Andorra la Vella. The investor who enters Encamp will obtain a better annual yield but will take longer to find a buyer when they decide to exit.
Suitable for the investor who maximises annual return and has a long investment horizon.
→ View available properties in Encamp
Sant Julià de Lòria and Ordino: specific markets for specific profiles
Sant Julià de Lòria
Rental demand is primarily driven by the property’s proximity to Spain. Purchase prices are moderate, but demand is more sensitive to cross-border economic fluctuations. Indicative gross yield between 4% and 5%, net yield between 3% and 4%.
→ View available properties in Sant Julià de Lòria
Ordino
A stable residential market with high demand from families seeking a high quality of life. Gross yield between 5% and 5.5%, net yield between 3.8% and 4%. According to the Government of Andorra, Ordino has restrictive construction regulations that limit supply and protect the heritage value of existing properties.
→ View available properties in Ordino
The table no-one publishes: rental profitability in Andorra by parish
Guidative data based on real market analysis. Ranges vary depending on the property's condition, typology, floor and exact area within each parish.
| Parish | Approximate gross rent | Rent. Guidance rent | Investor profile |
|---|---|---|---|
| Escaldes-Engordany | 5,5% – 6% | 4% – 4,5% | Stability / Good profitability / Higher initial investment |
| Andorra la Vella | 5% – 5,5% | 3,5% – 4% | Capital preservation / Safe investment / High liquidity |
| La Massana (village) | 4,5% – 5,5% | 3% – 4% | Mixed residential / International schools |
| La Massana (mountain) | Up to 7% gross | 4% – 5,5% | Holiday rental active investor / Seasonal management |
| Canillo | Up to 8% gross | 3,5% – 5% | Holiday rental with professional management / Grandvalira |
| Encamp | 5% – 6,5% | 4,5% – 5% | Maximum performance / Long term / Controlled prices |
| Sant Julià de Lòria | 4% – 5% | 3% – 4% | Cross-border profile / Peace of mind / Local profile |
| Ordino | 5% – 5,5% | 3,8% – 4% | Quality of life / Family / Wealth preservation |
The three warning signs that indicate an advertised return is not real
🚩 Signal 1: The calculation does not include voids
Any profitability forecast that assumes 100% occupancy throughout the twelve months of the year does not reflect the actual market. In the residential rental market in Andorra, one to two months of vacancy per year is the standard benchmark. In the holiday rental market, periods of non-occupancy are significantly longer during the off-season.
🚩 Flag 2: The community fees are not itemised
In properties with shared facilities, service charges can account for between 15% and 25% of annual gross income. If the projection does not explicitly include them, the figure is incomplete. The Andorra Chamber of Commerce, Industry and Services (CCIS) provides information on the obligations of property owners.
🚩 Signal 3: The second-hand purchase price is the catalogue price
Transactions in Andorra frequently close below the advertised price, especially for properties that have been on the market for more than six months. The regulations on property transfer tax are set out in the Legal Portal of Andorra.
How to proceed with an investment based on real profitability
The actual net rental yield of a specific property in Andorra depends on factors that do not appear on any portal: the technical condition of the property, the history of the owners' association, the rental demand profile on that specific street, and the actual price at which the transaction can be closed.
By sharing the available investment budget, the parish of interest and the desired profitability profile — stable residential, active holiday or mixed — the team filters the market and presents only options with net profitability calculated on real data, not catalogue projections.
Send a budget + parish of interest + desired profitability profile, and receive a filtered selection with real net yield.
Request filtered selection by real profitability →Frequently asked questions about rental profitability in Andorra
What is the average rental yield in Andorra?
The average gross yield ranges from 4.5% to 6.5%, depending on the parish and the type of property. The real net yield, after deducting service charges, vacancy costs, maintenance and tax, is usually between 3% and 5%.
Which parish in Andorra offers the best rental yield?
Encamp offers the highest net return on long-term residential lettings, ranging from 4.5% to 5% net. Escaldes-Engordany stands out for its stability and low vacancy rates. Canillo can exceed 8% gross for holiday rentals, but the net return depends critically on professional occupancy management.
How much can you earn from a rental apartment in Andorra?
A property in Escaldes costing €400,000 with a net yield of 4% generates approximately €16,000 per year after expenses. The same property advertised with a gross yield of 6% may end up with a net yield of 3.5% if the service charges are high.
Is it profitable to invest in holiday rentals in Andorra?
This may be the case in Canillo and La Massana (Pal/Arinsal area). The actual net return on a well-managed holiday property ranges from 4% to 5.5%. Without professional occupancy management, the margin is quickly eroded during the low season.
What is the difference between gross and net rental yield in Andorra?
The difference usually ranges between two and four percentage points. Gross yield divides the annual rent by the purchase price without deducting any expenses. Net yield subtracts community fees, void periods, maintenance, management and taxes.
What are the actual costs of a rented flat in Andorra?
The main expenses are: service charges (between €100 and €300 per month), vacancy costs (one to two months per year), maintenance (0.5% to 1% of the property’s annual value), rental management fees if outsourced (between 8% and 12% of the rent), and tax on property investment income in the investor’s country of residence.
Do I need to be a resident in Andorra to invest in buy-to-let?
No. Non-residents can buy properties in Andorra and use them for rental purposes. Taxation on the income applies in the investor's country of fiscal residence. From the advisory service Advice can be provided on the tax and legal aspects applicable to each investor profile.
