Should I Do Short-Term or Long-Term Rentals?

This decision comes down to one question: do you want a side business or passive income?

Short-term rentals (Airbnb, VRBO, vacation rentals) generate 20-40% more gross revenue in tourist destinations. A property that rents for €900/month long-term might pull €150/night on Airbnb, potentially €2,500-3,500/month at reasonable occupancy. On paper, the math is obvious.

In practice, short-term is a hospitality business. Guests arrive every few days. Each turnover requires cleaning, inspection, restocking. Messages come at all hours. Reviews demand immediate attention. Maintenance issues need same-day resolution because angry guests post reviews. You're running a small hotel, just fragmented across booking platforms.

Management companies handle this for 15-25% of revenue, but that premium often erases the income advantage over long-term. A property grossing €3,000/month short-term with 20% management fees nets €2,400. That same property at €900/month long-term with 8% management nets €828. Still better, but the gap narrowed.

Long-term rentals are beautifully boring. Find a tenant, sign an annual lease, collect rent monthly. Handle maintenance occasionally. Screen a new tenant annually when leases turn over. Management companies charge 8-10% if you use them. Your involvement is minimal.

The regulatory factor increasingly matters. Barcelona, Lisbon, Amsterdam, and dozens of cities restrict or ban short-term rentals. Some buildings prohibit them in community rules. Before assuming you'll Airbnb your investment, verify it's actually legal at your specific address.

A hybrid approach works for some properties: long-term September through May when tourism is slow, short-term June through August during peak season. Medium-term platforms like Flatio (1-12 month rentals) split the difference - more income than traditional long-term, less turnover than vacation rentals.