Anyone looking for a holiday home with excellent rental potential should head to a certain beach resort in Ibiza, after it topped a survey highlighting destinations where demand for holiday lets outstrips supply.

Playa d’en Bossa, near Ibiza Town on the Balearic Island famed for its nightlife, was rated the destination with the highest demand for tourist rental property by lettings website Holiday Lettings. Another Ibizan resort made the top 10, namely San Antonio at number 6.

Spain’s other set of holiday islands, the Canaries, which benefit from year-round sun, featured highly in the survey too. Tenerife’s Playa de las Americas, especially the Parque Santiago area, was ranked third and Playa del Ingles in Gran Canaria fifth. Owners should ensure they meet all legal requirements before letting out their property as the rental market is becoming more regulated in parts of Spain.

Kate Stinchcombe-Gillies, from Holiday Lettings, said: “For those considering a long-term investment from which they can gain some lifestyle benefits as well as additional income, holiday lets are a reliable asset. Self-catering holidays continue to see a huge surge in popularity as more and more people catch on to the benefits. As demand increases so too does the supply, with savvy investors spotting prime opportunities.”

For details of properties for sale in Spain, visit the listings on Rightmove Overseas. One way to save money when buying in Spain is to use a currency specialist when transferring your pounds into euros to complete the purchase of your property. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in Spain, collect The Overseas Guides Company’s ‘Spain Property Buying Guide’