Best areas to invest in tourist Pproperties in Tenerife

The best areas to invest in tourist properties in Tenerife are characterised by offering high returns and strong real estate activity. This is why buying a property in Tenerife has become a very attractive business opportunity, with excellent rental yields when the property is used as tourist accommodation. Discover the reasons why making an investment in tourist apartments in Tenerife makes sense, and which areas hold the greatest tourist interest. We will also look at the statistics behind the island’s real estate growth.

Why invest in tourist properties in Tenerife?

Buying tourist properties in Tenerife is an excellent investment opportunity, as the Canary Islands rank in the top 3 most popular autonomous communities among international tourists. Furthermore, Tenerife is not only one of the most developed areas of the Canary Islands, but also one of the safest.

Real estate growth in Tenerife in 2024

The real estate market in Tenerife grew by 15.84% compared to July 2023. The current average price per square metre stands at 2,852 euros, although this varies depending on the area and type of property. Tourist rental properties in Tenerife also saw growth of 14.67% compared to July. Over the past five years, this upward trend has remained consistent. Based on price trends, some of the best areas to invest in tourist properties in Tenerife include Santa Cruz de Tenerife, with an average of 3,160 euros per m², and Las Palmas, with an average of 2,298 euros per square metre.

High demand for properties to buy or rent

In 2021, 38% of tourists in Tenerife stayed in tourist homes or apartments in the island’s top areas. This figure in the rental market has continued to rise steadily. In 2023, property owners who dedicated their homes to tourist rental in Tenerife achieved returns 35% higher than those who used them for traditional long-term rental. The three areas with the highest tourist footfall were Costa Adeje, Playa de las Américas and El Médano. In Costa Adeje, the annual income from tourist apartment and house rentals reached 54,634 euros — the highest return recorded in 2023.

What are the best areas to invest in tourist properties in Tenerife?

• Costa Adeje
• Playa de las Américas
• Santa Cruz de Tenerife
• El Médano
• La Laguna
• Las Américas
• Puerto de la Cruz
• El Rosario

Costa Adeje

Costa Adeje has established itself as a genuine tourist haven. It also holds great appeal for vacation rentals thanks to its dream-like beaches. This is an excellent option for those looking for the best investment areas in Tenerife with high returns. It stands out for its exclusive and luxury properties, with spectacular villas and houses a common sight.

BENEFITS	CONSIDERATIONS
Continuously developing urban infrastructureProperties with rising values in the marketWide variety of tourist propertiesExcellent location with easy access to the airport	Some tourist properties in Costa Adeje can be expensive.

Playa de las Américas

Renting tourist properties in southern Tenerife is an excellent way to generate a steady stream of passive income. Tourist activity in this area is strong not only during peak season but throughout much of the year.

BENEFITS	CONSIDERATIONS
Southern Tenerife offers very favourable tax conditions.The area is associated with luxury and exclusivity.Strong demand for short-term rentals.	The most luxury properties may take slightly longer to sell.

Santa Cruz de Tenerife

A large share of the Tenerife tourist market is concentrated in this area, which combines spectacular landscapes with an urban development that is truly impressive. In addition to having one of the most solid real estate markets in the Canary Islands, it also offers excellent business potential. The main reason to invest in tourist properties in Santa Cruz de Tenerife is that they are likely to increase in value over the medium and long term, making it a relatively secure, high-return investment.

BENEFITS	CONSIDERATIONS
A wide variety of excellent neighbourhoods to invest in.Highly active real estate market offering a broad price range.One of the most popular areas in constant demand for tourist purposes.	The real estate market in Santa Cruz de Tenerife is one of the most competitive.

Other areas to invest in tourist accommodation in Tenerife

While investing in properties in Santa Cruz de Tenerife is one of the most ambitious options — offering an annual return of up to 6.8% — there are other interesting areas worth considering:

• El Médano: one of the best options for investors with a long-term outlook. Several parts of the area are yet to be developed, making it an ambitious and promising alternative.
• La Laguna: there are many properties ready to be converted into tourist accommodation in northern Tenerife. It is a very popular area among students looking for temporary housing.
• Las Américas: a city well known for its lively atmosphere and excellent nightlife, which intensifies during peak season.
• Puerto de la Cruz and El Rosario: in addition to their advanced urban development, multiple projects have been launched to increase tourist footfall in both areas.

Conclusions and final recommendations

Finally, it is worth noting that the Tenerife tourist market is one of the best for consolidating long-term investments. According to analysts, excellent property appreciation can be seen within 5 to 10 years of purchase. If you are looking to buy a property and need a reliable tourist apartment management agency in Tenerife for your new home or an existing one, do not hesitate to contact us.