Invest in residential property in Toledo with a 6% net rental yield
Last Updated on 19 December 2025 by Equipo Urbanitae
We present a new opportunity for direct residential investment in Santa Olalla (Toledo), a well-established municipality that combines very competitive entry prices with growing rental demand. Located around 35–40 minutes south of Madrid and well connected to Toledo and Talavera de la Reina, Santa Olalla has become an increasingly attractive alternative for investors seeking high returns without the need for a large initial outlay.
The property offers 85 sqm of built area (74 sqm usable) and is located on a second-floor exterior unit with lift. It features two bedrooms, one bathroom, a spacious living room and a kitchen, a layout in high demand in the long-term rental market. In addition, it is sold with a parking space included, an added value that improves both rental speed and the asset’s future liquidity.
A refurbished apartment ready to rent
One of the main strengths of this investment is that the property will be delivered fully refurbished, with the exception of kitchen furniture, appliances, lighting and utility connections. This allows investors to access an asset that is practically new, without the need to undertake construction works or complex management, and with the option to place it on the rental market immediately.
The refurbishment, together with its exterior condition and functional layout, matches exactly what the typical tenant in the area is looking for: a comfortable, efficient apartment with controlled maintenance costs. This helps reduce tenant turnover, supports income stability and strengthens the overall security of the investment.
Net yield of 6%
From a financial perspective, the transaction stands out for its balance between risk, capital required and return. With a price of €90,000, this is a relatively uncommon opportunity: a refurbished apartment with parking for under €100,000, in a location well connected to Madrid.
Under a long-term rental scenario, with an estimated rent of €650 per month, the investment offers an approximate net yield of 6% without financing. This level of return is particularly attractive for a refurbished residential asset with established demand.
Under leveraged scenarios using mortgage financing, the return on invested capital increases significantly, reaching approximately 12.9%. Assuming a sale after five years, the transaction could achieve an estimated IRR above 15% (as a private individual), combining rental income with asset appreciation.
Santa Olalla: affordable prices and growing population
Santa Olalla is a municipality with consolidated services, local retail, educational centres and a stable residential environment. Its location is especially attractive for those working across the Madrid–Toledo–Talavera corridor, thanks to:
- Direct access to the A-5 and A-40
- 35 minutes from southern Madrid
- 30 minutes from the city of Toledo
- 20 minutes from Talavera de la Reina
This connectivity, combined with lower prices than those in the Madrid region, explains the increase in residential demand and, in particular, rental demand. More and more profiles are seeking well-connected towns with lower price pressure and a stronger value-for-money proposition.
In addition, population growth and the limited supply of refurbished, rental-ready housing further enhance the appeal of this type of asset, which is typically absorbed quickly by the market.
Why invest in this property?
In our view, these are the key highlights of the opportunity:
- Very low entry price: €90,000
- Refurbished apartment, ready to rent
- Parking space included
- Net rental yield of 6% without financing
- Up to 12.9% with leverage
- Estimated IRR above 15% in a five-year exit scenario
- Strong rental demand in the area
- Well-connected location to Madrid, Toledo and Talavera
- Highly sought-after layout: 2 bedrooms, exterior unit with lift
- Ability to generate income from day one
Generate income from day one
Overall, the Santa Olalla property represents a balanced and attractive opportunity for investors seeking residential exposure with an affordable entry point, recurring income from day one and clear medium-term appreciation potential.
