Introduction
The Spanish property market is changing: prices are rising, while supply is melting like snow in the sun. Once shunned, small apartments under 50 m² are now a strategic option for investors.
With a little ingenious work, these small areas become optimized living spaces that are functional, attractive and highly profitable.
Terreta Spain's experts give you their top tips for rehabilitating your small spaces.
Optimizing space: a key to attractiveness
Background and market
In Spain's major cities and tourist areas, the scarcity of real estate(historic fall in stock of -20% in Q2 2025) and rising rents (€14.6/m², +10.9% in one year) make the intelligent conversion of small apartments very attractive.
Profiles of small-space tenants
Students, young professionals, digital nomads and tourists on short- or long-term rentals are the perfect candidates for this well-thought-out type of accommodation.
Immediate added value
In Madrid, Barcelona and Valencia, many older, often under-utilized studios and two-bedrooms are now available for sale. With the right renovations, it is possible to maximize their rental potential and resale value: according to Gaetano Grana, our renovation manager, in certain areas, renovations can increase the price of the property by up to +30%.The same applies to profitability.
In Valencia, for example, a small 52 m² apartment rented for €1,100/month before renovation and renovated by Terreta Spain now achieves :
- 1,500/month for long-term rental ;
- And between €1,800 and €3,000/month depending on the season for a medium-term contract.
We'll share the before-and-after below.
Apartment renovated by Terreta Spain in Valencia's Cabanyal district. Optimized small bedroom: double bed, smart desk in front of the sliding window, large chest of drawers highlighted by almond green paint, mirror enlarging the space and extra seating for added comfort.
Contact Terreta Spain to transform your small apartment and increase its profitability by up to 30%.
The advantages of renovating a small space
Rehabilitating a studio or a small two-room apartment still in its original state is a good way :
- Increase the value of the property and therefore the rent;
- Increase demand;
- Improve tenant comfort;
- Reduce staff turnover and vacancy rates;
- Limit maintenance and minor repairs;
- To select quality, solvent and careful candidates for rental;
- Benefit from tax incentives and deductions that ultimately increase profitability.
Intelligent work: our experts' best ideas
Modularity and flexibility for small apartments in Spain
Renovating a small space means hunting for wasted space and finding ways to make the most of every square meter, just like in a boat cabin.
Here are our experts' top tips:
Compartmentalize without partitioning: install movable partitions, sliding doors, dual-function furniture or skylights to create separations without isolating spaces or blocking light.
Use decoration to delimit living areas: vary floor coverings to visually mark a zone (an open kitchen, for example), paint a section of wall a certain color to define a headboard, reading area or other area.
Opt for multi-functional furniture: sofa-beds, fold-down desks, benches hidden in bookcases, sideboards that transform into tables for 6: all smart, retractable pieces of furniture are welcome. As a result, your interior becomes a modular jigsaw puzzle like a ship's cabin. In the same room, you can have your bedroom, kitchen and living room in turn... without ever feeling cramped.
Exploiting ceiling height
If your apartment is small but you're lucky enough to benefit from high ceilings (from 2.50 m), make the most of them.
Rely on overhead storage units: this frees up floor space and visually enlarges the room. Choose closed modules in the same color as the wall for a streamlined look, or play on contrasting colors and materials for a more assertive style.
Go for the XXL bookcase: floor-to-ceiling, with a designer ladder to reach books or objects perched high up. Tip: use shallow shelving to avoid taking up floor space.
If you have a ceiling height of at least 4 m, a mezzanine is a must. It can free up up to 4 precious m² (the size of a king-size bed) of floor space. If you have enough space, opt for drawer staircases. You'll be able to store sheets, household products and all the other odds and ends that can get in the way.
Optimizing forgotten spaces
In a small apartment, these often neglected areas can become real assets. With a little ingenuity, they can be transformed into spaces that are both practical and decorative. On the other hand, avoid overloading them with chairs pushed up against the walls, baskets on the floor or any other unnecessary elements.
- An alcove or the corner of a room? Perfect for a small occasional desk.
- A hallway? Why not create a discreet dressing room.
- A small entrance? Optimize it with coat hooks, narrow shelves and benches that can accommodate shoes.
Optimizing light in a Spanish studio
To make an XS-sized apartment seem larger, there's one golden rule: open it outwards to let in as much natural light as possible, or add direct and indirect light points to shape the spaces.
Enlarge windows wherever possible.
Install a skylight.
Eliminate non-essential corridors.
Replace a solid partition with a glass roof, track-mounted blinds that open and close to suit your needs, or an ultra-fashionable claustra to allow light to flow freely between different living spaces.
Use mirrors to enlarge the space and reflect light.
Use light colors on walls and floors.
Innovative technical solutions
If you're embarking on a renovation project, whether large or small, integrating home automation into your project is bound to be a good idea.
All-in-one ecosystems that manage heating, lighting, shutters, alarms, etc. in a single app are no longer seen as gadgets and are now valued by tenants.
You'd also be right to focus on energy efficiency: improving the DPE by installing double-glazing or better insulation, low-consumption household appliances, solar panels or heat pumps where possible... All these features appeal to increasingly demanding tenants who appreciate sustainability and savings on energy bills.
For investors, there are numerous tax benefits.
To find out more about energy renovation in Spain, click here.
And if you're looking for a trusted renovation company in Spain, contact our experts. They renovate over a hundred homes every year, particularly in Madrid, Barcelona and Valencia, and will help you make the best technical, aesthetic and sustainable choices.
Ask for a free quote.
Profitability and value of small apartments in Spain
Gaetano Grana, our construction manager, and his team recently renovated a small 52 m² (72 m² built) apartment on Carles Ros street, in the heart of Cabanyal, the old fishermen's quarter on the way up to Valencia.
Discover this incredible before-and-after in pictures.
BEFORE
Photo gallery with front images, stored in drive folder
AFTER
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Meet Gaetano, our construction manager, on video: https: //www.youtube.com/watch?v=t6H-LA1pB98
And for a guided tour of Valencia, go here: "The ultimate Terreta Spain guide to Valencia's neighborhoods".
What's the budget?
Time to get out the calculator.
In Spain, the average cost of a complete renovation in 2025 varies according to factors such as location, type of materials and quality of finish.
Standard renovation
For a complete standard renovation (redistribution of spaces, kitchen and bathroom renovation, electrical/plumbing upgrades, medium to high quality materials), prices per square meter generally range from €600 to €800/m² + VAT.
High-end renovation
For high-end projects (premium finishes, noble materials, state-of-the-art equipment (home automation, custom architecture, advanced energy solutions) costs can exceed €1,000 or even reach €1,200 per square meter + VAT.
To take the example of the 52 m² apartment refurbished by our teams in the Cabanyal district of Valence, the total budget was €86,000 (work + furniture).
Terreta Spain tip: determining the precise scope of your project is the first step to controlling your budget and avoiding unpleasant surprises.
Work permits in Spain
In Spain, before starting any renovation work, it's essential to fully understand the legislation on building permits and licenses, since obtaining them is a prerequisite for the legality of the project.
Depending on the scope of the work, there are two main types of authorization:
- Minor works permit , la licencia de obra menor for work that does not affect the structure or common elements.
- And the major works permit , la licencia de obra mayor for structural or façade modifications, or modifications to common elements.
Some situations also require specific permits, for example to work on a listed building or install a rubble container on the public highway.
Each municipality sets its own rules: documents required, pre-inspections, authorized opening hours, as well as the cost of licenses.
💡Attention: note that the co-ownership can oppose work affecting the common areas, even if it's the town hall that issues the authorizations. Careful preparation and the support of local professionals can help avoid delays, additional costs and administrative blockages.
To find out more, read our fact sheet on work permits in Spain, and if you want to know everything there is to know about work in the country, discover our complete guide to renovating your property in Spain.
Subsidies in 2025
In 2025, support for housing renovation in Spain will be governed by the Recovery, Transformation and Resilience Plan(PRTR), financed by NextGenerationEU funds.
The aim? Improve the energy efficiency and habitability of housing, with a total budget of 6.82 billion euros.
Tax deductions for energy renovation
Tax benefits onIRPF (resident's income tax) are extended until 2026. They allow :
- A deduction of 20% for a reduction of at least 7% in heating/cooling demand.
- 40% for a reduction of at least 30% in non-renewable primary energy consumption, or for an A or B energy label.
- 60% for the same conditions but applied to entire residential buildings.
The maximum amount is €5,000 per year, which can be accumulated over 4 years to a maximum of €15,000. Grants received under these programs are not taxable.
Program to help improve the energy efficiency of homes
- Grant of 40% of the cost of the work.
- Ceiling: €3,000 per home.
- Minimum cost: €1,000 per home.
Building-scale rehabilitation assistance program
Assistance for building renovation covers between 40% and 80% of costs, and up to 100% in cases of economic vulnerability. Amounts range from €6,300 to €18,800 per home, depending on the energy savings achieved.
Program for drafting projects and the "Book of Existing Buildings".
In Spain, there is also a specific grant to help finance the preparation of an XXL renovation project. It is mainly aimed at condominiums and covers the completion of the Libro del edificio existentea complete diagnosis of the building's condition (up to €3,500), and the drafting of the rehabilitation project (up to €30,000). The amount granted varies according to the number of units in the building, and helps finance the essential preliminary stage before starting work and applying for other subsidies.
Institut Officiel de Crédit guarantees
Finally, a new ICO(Instituto de Crédito Oficial) program guarantees private loans for energy renovation.
Advice for foreign investors
- Entrust your project to a specialist in small-space optimization aka Gaetano Grana.
- Check local regulations.
- Prioritize energy performance: when you renovate, this opens the door to financial aid, improves the value of the property and attracts premium tenants.
- Prepare a solid file: detailed layout plan, professional estimates, up-to-date administrative authorizations.
Conclusion
Intelligently renovating an apartment of less than 50 m² in Spain combines profitability, comfort and attractiveness. A smart investment in a booming market. Do you have a renovation project in mind? Make an appointment with our experts.
FAQ : Intelligent renovation of a small apartment in Spain: expert advice to boost your profitability
Why invest in a small apartment in Spain?
Because demand is strong: students, young professionals, digital nomads and tourists are looking for well-designed accommodation. In a market where rents have risen by +10.9% in one year, and property stock has fallen by 20%, these units offer strong rental potential and easy resale.
What profitability can you expect after renovation?
According to our experts, a well-thought-out renovation can increase the value and profitability of a small apartment by up to 30%. For example, a 52 m² apartment rented at €1,100/month could rise to €1,430/month after renovation.
What are the most effective ways of optimizing space?
- Movable partitions, skylights and multi-purpose furniture
- Use of ceiling height (mezzanine, overhead storage)
- Optimization of wasted areas (hallway, entrance, alcove)
- Maximize natural light (openings, skylights, mirrors, light colors)
What technical equipment adds the most value to the property?
Home automation (heating, lighting, shutters, etc.) and energy-efficient solutions (double glazing, insulation, heat pumps, low-consumption appliances). These improvements appeal to high-end tenants and are eligible for subsidies.
What administrative procedures are required?
In Spain, a licencia de obra menor is required for light work not affecting the structure, and a licencia de obra mayor for structural work or work on common areas. Some situations also require specific permits (listed buildings, rubble containers, etc.). Each town council sets its own rules, and the agreement of the co-ownership may be essential.
What financial assistance is available in 2025?
- IRPF tax deductions: up to 60% reduction depending on energy savings
- Energy efficiency grant: 40% of cost, maximum €3,000
- Rehabilitation grants: 40% to 80% of costs, up to 100% for vulnerable households
- Livre du bâtiment existant" grant: up to €30,000 for condominium projects
- ICO loan guarantees to finance energy renovation
How much does a complete renovation cost?
Standard: €600 to €800/m² + VAT
Upscale: €1,000 to €1,200/m² + VAT
The cost depends on the location, materials, finishes and equipment chosen.
What risks should be avoided?
- Neglecting procedures with the condominium or town hall
- Start work without legal authorization
- Underestimate actual budget or deadlines
- Forget energy performance, which affects profitability and available subsidies
Why use a specialized professional?
A small-space optimization expert knows how to maximize every square meter, navigate Spanish regulations and coordinate trades to deliver a profitable, compliant and attractive project.
How to get started
- Define your objective (long-term rental, short-term rental, resale)
- A customized layout plan
- Obtain quotations and authorizations before signing
- Take advantage of available grants to reduce overall costs
Is it possible to monitor the site remotely?
Yes, many agencies and architects offer digital monitoring, with regular reporting for international investors. Such is the case with Terreta Spain. Book an appointment online with our experts.
Sources: Idealista, Ministerio de Vivienda, ICO
