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Investing in a Home for a Holiday Rental or a Long-term Rental? Pros and Cons

Investing in a Home for a Holiday Rental or a Long term Rental Pros and Cons - Investing in a Home for a Holiday Rental or a Long-term Rental? Pros and Cons

Choosing to rent a home like a holiday rental or a long-term is a common question faced by those who wish to invest in real estate. However, there is not always a clear answer. Different factors determine which of the two options may be more advantageous in certain circumstances.

Carefully analyzing these issues is the only way to find the key to maximizing rental income. These are aspects such as the location, the expenses associated with each type of rental, the legislation or even the level of risk that you wish to assume.

Advantages and disadvantages of a holiday rental home

Holiday rentals offer short stays, from a single night to several weeks. It can provide high profitability, but it is not without risks.

Advantages of having a holiday rental home

The potential income is higher than in long-term rentals, especially considering there is more flexibility, and prices vary according to seasons or even days of the week with greater demand.
• In vacation rentals, the risk of non-payment is minimal. That's because clients pay for their stay in advance.
• There is flexibility to use the home personally during a period or even sell it without any inconvenience if desired.

Disadvantages of tourist rental

The expense is higher. The home must have furniture, kitchenware and everything necessary for the stay. Besides, we must add the costs of maintenance and utilities: water, electricity, Internet, cleaning, etc.

• In most cases, it is necessary to achieve a high occupancy to obtain adequate profits or make the investment profitable in a not excessive period.

• They are subject to municipal or regional regulations that can significantly limit tourist rental activity.

The risk assumed with holiday rental homes is usually higher than in the case of long-term. In brief, the number of bookings is irregular, and so are the earnings.

Advantages and disadvantages of traditional long-term rental

A long-term rental is one in which it is necessary to sign a contract for a specific period and whose deadlines are established by law.

Advantages of a long-term rental home


Income is regular and predictable in the vast majority of cases.
• Expenses are reduced because the tenant assumes basic supplies and sometimes even furniture and other belongings.
There are tax incentives in the form of deductions of between 50% and 90% in personal income tax for renting housing.

Disadvantages of long-term rental

Less flexibility in terms of rental price. There may be limitations in stressed areas, according to the new Housing Law.
• Greater risk and losses in the event of non-payment.
Less availability of the home. It'll be necessary to wait for the end of the contract to be able to make changes to it or to recover the property.

If you intend to invest in properties to rent, go to Spainhouses.net. In a few seconds, you'll be able to choose from a wide range of properties on the coast and inland. You'll see an immense list of homes with very different features that will adapt perfectly whether your interest is a holiday or long-term rental home.

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