Top 7 European cities for real estate investment in 2025

What makes a city the ultimate destination for real estate investors? Is it the allure of cobblestone streets, the hum of a thriving market, or the promise of solid financial returns? 

In 2025, the answer is clear: savvy investors are chasing cities where postcard-perfect charm meets cold, hard profitability, with rental yields leading the charge as the defining metric.

Rental yield—simply put—is the annual rental income as a percentage of the property’s purchase price. It’s the golden rule of how quickly your investment starts paying you back. 

In a market where every decimal point matters, European cities with high yields are taking centre stage and proving that beauty and profits can go hand in hand.

Here’s a look at the top five European cities for real estate investment in 2025, according to data from Global Property Guide. 

1. Riga, Latvia – Rental yield: 8.47%

Riga, Latvia’s capital and a UNESCO World Heritage site, tops the European charts with an impressive 8.47% average rental yield. 

Known for its stunning Art Nouveau architecture and charming Old Town, this jewel of the Baltics combines affordability with a high quality of life. 

Whether sipping black balsam (a traditional herbal liqueur) or wandering its vibrant Central Market, there’s something magical about this Baltic gem.

Best choice for investors: A two-bedroom apartment in the Agenskalns neighbourhood delivers a jaw-dropping 11.68% yield. Priced at €174,700 and renting for €1,700 monthly, it’s an investor’s dream come true. Known for its green spaces and historic wooden architecture, Agenskalns is a neighbourhood on the rise.

2. Dublin, Ireland – Rental yield: 6.83%

Dublin isn’t just about Guinness and lively pubs—it’s also a rental powerhouse. 

A tech hub and home to many multinational headquarters, Dublin boasts strong demand for housing. Its cobbled streets, literary legacy, and thriving arts scene attract professionals and expats alike.

Best choice for investors: A two-bedroom apartment, with a yield of 7.94%, hits the sweet spot. At €375,000 and with monthly rents of €2,482, this is a high-demand property type in a city that never seems to lose its shine.

3. Podgorica, Montenegro – Rental yield: 6.67%

Montenegro’s capital, Podgorica, might not be the first name on a traveller’s list, but it’s quietly becoming a real estate darling. 

Nestled near stunning Adriatic beaches and ski resorts, Podgorica offers both affordability and charm. Think Balkan cuisine, ancient ruins, and café-lined boulevards.

Podgorica currently represents the perfect opportunity for those seeking a low-cost, high-return investment.

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Best choice for investors: Studio apartments shine here, with a remarkable yield of 7.62%. Priced at just €52,000 and renting for €330 monthly, Podgorica offers one of the most budget-friendly opportunities in Europe.

4. Warsaw, Poland – Rental yield: 6.49%

As Poland’s economic heart, Warsaw is a city that thrives on innovation and culture. Its skyline is a mix of modern skyscrapers and historic landmarks, including the rebuilt Old Town. The city’s vibrant nightlife and affordable cost of living make it popular with young professionals.

Best choice for investors: Three-bedroom apartments boast the highest yield, clocking in at 8.00%. At €350,631 and renting for €2,338 monthly, it’s an attractive option for families and groups looking for spacious accommodation in this vibrant city. 

5. Bucharest, Romania – Rental yield: 6.23%

Romania’s bustling capital is poised for a real estate boom, especially with its upcoming Schengen zone entry on 1 January 2025. 

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Bucharest blends history and modernity, with grand boulevards, communist-era architecture, and vibrant nightlife. As tourism grows, so will the demand for short-term rentals.

Best choice for investors: In the Drumul Taberei neighbourhood, studio apartments lead the pack with an 8.24% yield. Priced at €51,000 and renting for €350 monthly, they are a low-cost, high-reward option.

6. Brussels, Belgium – Rental yield: 5.54%

Brussels, the heart of the European Union, offers investors a mix of political prestige and rental demand. Its cosmopolitan flair, historic squares, and unbeatable chocolate culture make it a desirable destination for professionals and tourists alike.

Best choice for investors: A three-bedroom apartment in Brussels City offers a solid yield of 5.67%. With a purchase price of €550,000 and a monthly rent of €2,600, it’s a reliable investment option that combines spacious living with stable returns.

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7. Madrid, Spain – Rental yield: 5.49%

Spain’s capital is a city that blends old-world charm with modern vibrancy. From the buzzing nightlife in Malasaña to the iconic Prado Museum, Madrid offers a lifestyle that’s hard to beat. However, its rising property prices have slightly dampened yields.

Best choice for investors: A studio apartment in Centro, Madrid’s historic heart, delivers the highest yield at 6.50%. Priced at €240,000 and renting for €1,300 monthly, it’s an option that combines strong returns with prime location.