Is it more beneficial to rent to tourists or long-term tenants?

Many homeowners wonder if it is more profitable to rent their home long-term or short-term.

February 24 2023 (11:34 WET)
Woman and her family thinking about options

Home rentals continue to rise in recent years. More and more people are generating income from their owned homes. However, many homeowners wonder if it is more profitable for them to rent their home long-term or short-term. In other words, they are considering whether to use their homes as vacation rental apartments.

The answer is not simple. In reality, no one has the answer. But in this article, we want you to learn in detail the advantages and disadvantages of each and that you can finally decide for yourself which of the 2 options is better or more profitable for you.

Advantages of tourist rentals 

Now we are going to mention some advantages of short-term or tourist rentals. If this is your final decision, we recommend that you acquire the services of a tourist apartment management company in Barcelona. These companies can help you with the most common events that this type of rental may entail, such as cleaning, maintenance, or key collection and delivery.

  • You can get a higher income from renting your home

The income obtained monthly from vacation rental apartments is usually between 30 and 40% higher than what can be obtained from a home rented long-term.

  • You will have less risk of suffering significant defaults

One of the biggest current concerns of homeowners is that their tenants take a long time to pay or do not pay at all for a while. Suffering defaults can end in a long legal process and many headaches.

In this case, short-term or vacation rentals have less risk of default. Or in any case, if you were to suffer any default, it would not have the severity that it can have in a long-term rental.

Even, in many cases, vacation rental companies have default insurance or can take care of it themselves if this happens. All of this can be a great relief for many people who deal with the stress of having to face this situation.

  • The profile of the tenants is usually more reliable

Finding responsible tenants is very complicated on some occasions. In this case, the profile of people who rent short-term or for vacations may be a little more respectful of the home than long-term rentals.

This occurs more frequently when companies rent homes temporarily for their employees.

Now we are going to focus on some of the advantages of long-term or permanent housing rentals.

Advantages of renting homes long-term or permanent homes

And these are some of the advantages of long-term rentals.

  • You do not have to pay tourist taxes.

Long-term rentals do not have to pay any type of tourist taxes by the owner.

  • Possibility of deducting certain expenses

One of the biggest benefits of long-term homes is that many of their expenses can be deducted and included in the income tax return. For example, it is possible to include the repair expenses that we have had to make in the home. It is also possible to impute 3% of the expense incurred in the purchase of the home for more than 30 years. Even 10% of the furniture expense can be imputed for 10 years.

  • Possibility of a higher profitability

Although as we have mentioned, vacation or short-term rentals can generate more income, all the deductions that a long-term home rental entails can generate good profits. It is estimated that the reduction in net income can be up to 60% when the home is rented on a regular basis.

  • Greater possibilities of having our home occupied

Long-term rental homes can be a relief if we find a good tenant who decides to stay in our home for a long time. That way it will not be necessary to look for new tenants every so often.

These are just some of the advantages of each of the two types of rentals. We know that renting a home can be difficult. And there is no single answer as to which is the best type of rental, since each case is different and has its pros and cons, so it is advisable to get oriented on the benefits of each of the modalities to decide what is best in your particular case.