If you are unsure whether to put your property into holiday letting or traditional rental, you have probably already realised one thing: everyone has an opinion.
Some people tell you it is a goldmine.
Others tell you it is a headache.
As is often the case, the truth sits somewhere in the middle.
That is why we have prepared this guide to the pros and cons of holiday letting, so you can assess whether it fits your situation.
No fluff, with updated data and, above all, with our own data from managing more than 600 homes.
Bear in mind that every case is different, regulations vary by autonomous community and even by municipality, and everything depends on the type of host or landlord you want to be. Get good advice before deciding.
With that clarification made, let us look at the advantages.
Advantages of holiday letting
Higher profitability
This is the advantage that attracts owners most, and in many cases it is real. Holiday letting lets you set a nightly rate and take advantage of high-demand weeks, such as bank holidays, long weekends, winter season in the Canary Islands or summer on the coast.
To give you an idea: according to AirDNA, average daily rates in cities such as Madrid are currently around USD 140, in Barcelona USD 177 and in Santa Cruz de Tenerife USD 113, with occupancy above 60%.
That said, be careful not to confuse gross income with net profitability. Cleaning, platform commissions, utilities and maintenance all affect the margin.
So the key is to run the numbers. If the monthly net profit after all expenses does not clearly exceed what a long-term rental would give you, the added complexity may not be worth it.
But let us not get ahead of ourselves.
Flexibility
Unlike long-term rental, with holiday letting you can block dates for personal use whenever you want. Family holidays, maintenance, renovations: you decide when the property is available and when it is not.
There is, however, an important nuance: every night you block during high season is a night you do not invoice. The trick is to reserve lower-demand weeks for yourself and leave the strongest dates open.
It sounds obvious, but you would be surprised how many owners do exactly the opposite.
Risk diversification
With traditional rental, you depend on one tenant. If they stop paying or the relationship becomes difficult, you have a serious problem.
In holiday letting, by contrast, the high turnover of guests dilutes that risk. If one guest cancels or leaves a poor review, the impact can be absorbed by the next bookings.
And by working with several distribution platforms such as Airbnb, Booking.com and Vrbo, you are not dependent on one acquisition channel, which adds another layer of diversification.
Better property conservation
This surprises many owners, but it makes sense. In holiday letting, the property is thoroughly cleaned between stays, so any damage is detected quickly and can be repaired before it gets worse.
In long-term rental, by contrast, certain problems such as early damp, dripping taps or damaged paint can build up for months or years without the tenant reporting them.
The result? A holiday home is usually in better condition over the long term, provided management is professional and regular checks are carried out.
Disadvantages of holiday letting
Complex management that is better delegated
If profitability is the main advantage, management is undoubtedly the main disadvantage.
Why? Because holiday letting is, in practice, a small hospitality business, and many owners do not realise that important detail. You have check-in, check-out, cleaning between stays, guest communication, incidents, consumables and reviews.
And all of this happens seven days a week, at any time, because a hot water issue at 11pm on a Friday cannot wait until Monday.
Cleaning costs per turnover in Spain usually range from EUR 30 to EUR 120 per service, depending on property size. If you have eight or ten stays per month, cleaning alone can add up quickly.
Then you need to add platform commissions and, if you delegate, the management fee, which usually ranges from 15% to 35% of income.
But do not be discouraged, because we can tell you that it can still be very profitable. Keep reading and you will see why.
Irregular income
Unlike long-term rental, where you receive the same amount every month, holiday rental income fluctuates. It depends on season, local events, air connectivity, competition in the area and broader economic conditions.
In destinations with a “double season”, such as the Canary Islands, where winter demand is strong, seasonality is softened considerably. But even in the best markets, some months are weaker.
The prudent approach is therefore to calculate with a conservative scenario: lower occupancy and a lower rate than you think you will achieve. If the numbers still work, you are on the right track.
Restrictive regulations
This is probably the factor that has changed most in recent years. In Spain, holiday letting is subject to an increasingly complex regulatory framework:
- The national short-term rental register
- Traveller registration obligations under Royal Decree 933/2021
- The tourism regulations of each autonomous community
- Municipal urban planning restrictions
- And owners’ community rules.
For example, since 2025, owners’ communities can approve, with a three-fifths majority, limits or bans on tourist-use homes in the building, and can even impose a surcharge of up to 20% on community fees.
In the Canary Islands, Law 6/2025, which we have already discussed in another article, introduces a land-planning approach with caps linked to each municipality’s residential housing stock. This means location matters more than ever.
Greater wear and tear
High turnover has a less attractive side: guests who are passing through generally take less care of a property than a stable tenant who sees it as their home. This translates into faster wear on furniture, linen, towels, kitchenware and appliances.
The positive point, as we saw earlier, is that this wear is detected quickly thanks to frequent cleaning. But that does not remove the cost: you will need to replace linen, towels, kitchenware and small appliances more often.
In any case, it is simply a factor to plan for. Holiday letting remains profitable in 2026 and is worthwhile in many cases.
Comparison with long-term rental
Economic stability
The great strength of long-term rental is predictability. The same amount reaches your account every month, without depending on seasonality, reviews or platform competition.
That allows you to plan with much more calm and, above all, sleep better at night. For many owners, that stability has a value that cannot be measured only in euros.
Less management
In a long-term rental, the tenant takes care of the property’s day-to-day upkeep. You only step in for structural repairs or significant faults. There are no check-ins, and you do not need to provide a service every few days.
The time commitment is incomparably lower, making it the natural option for owners who live far from the property, have little time or simply prefer not to complicate things.
Tax benefits
There is a difference here that many owners overlook. In long-term rental, if the contract meets certain conditions, such as being the tenant’s main home, the Spanish tax authority allows reductions in personal income tax.
In holiday letting, that reduction does not exist. Tax is calculated on net income without reductions, unless you provide hospitality services, in which case the tax treatment changes completely and VAT or IGIC may come into play.
In addition, days when the property is neither rented nor used personally may generate imputed income in your tax return, a small additional tax cost worth considering.
Disadvantages of long-term rental
So far, traditional rental may seem like the “safe” option with little room for debate. But it also has drawbacks, and you should know them before deciding.
Limited profitability
Long-term rental offers stability, yes, but in exchange for an income ceiling. The monthly rent is fixed by contract and annual increases are regulated by law, which means that in high-demand areas you may leave potential income on the table.
For example, a flat that generates EUR 900 per month in traditional rental could invoice much more as a holiday let during strong months, provided occupancy and management support it.
Risk of non-payment and difficult occupation
Although holiday letting turnover has its disadvantages, dependence on one tenant is also a double-edged sword. Prolonged non-payment, eviction proceedings or a difficult relationship can become a serious problem.
Less control over the property’s condition
In a long-term rental, you do not enter the property except in specific circumstances. That means damage can accumulate without you knowing until the tenant leaves: damp, neglected installations, broken furniture or poorly maintained rooms.
It is therefore common for an owner to recover a property after several years and find an unexpected renovation waiting.
Contractual rigidity
The Urban Leases Act protects tenants with mandatory extensions that can lengthen the contract far beyond what the owner originally expected. If at some point you need the property for personal use, selling or changing strategy is not always simple.
Still unsure? Speak to an expert
As you can see, the pros and cons of holiday letting are fairly balanced. There is no universal answer: it depends on your property’s location, local regulations, your availability to manage, or delegate, and the return you expect.
In any case, if you want profitability without taking on the full operational workload, Home2Book is an agency specialising in holiday and traditional rental management.
We manage more than 600 properties and take care of everything: from cleaning and guest or tenant support to revenue management and regulatory compliance.
Would you like to know which model best suits your property?
Contact us and we will analyse it together.
