Why investing in holiday homes and short-term rentals properties
Short-term rentals, the product of our modern sharing economy revolution creates opportunity and challenges for property investors. Here is an guide about what is relevant about the whole concept and what are the benefits.
Sharing resources and services has totally changed how we travel and find places to stay. The sharing economy, which has really taken off recently, is shaking up traditional industries like hospitality. One big part of this is short-term rentals, giving travellers new choices and letting homeowners make money from their properties. Let's dive into the world of short-term rentals and how is changing the way residential property investments are made.
What Are short-term rentals?
Short-term rentals are places you can stay for a few days or weeks, unlike long-term leases or hotel stays. Thanks to online platforms, it's super easy for hosts to list their places and for travellers to find and book them. Some of the top short-term rental sites are Airbnb, Vrbo, and Booking.com.
Why short-term rentals have become so successful?
Choices: Short-term rentals let you pick a place that fits exactly what you need. Whether you’re traveling alone, with family, or a bunch of friends, you can find the perfect spot.
Save Money: They often give you more bang for your buck, especially if you're traveling with a group. Plus, many have kitchens so you can cook your own meals and save on eating out.
Live Like a Local: Staying in a short-term rental lets you dive into the local scene. You can explore neighbourhoods and get tips from your hosts on where to go and what to do.
More Privacy: These rentals usually offer more privacy than hotels. You can have the whole place to yourself, making it a more personal and intimate experience.
As the sharing economy advances, societies adapt quickly to new supply & demand. As the portal Airbnb has increased number of booked nights in its system from over 72 Millions in 2015 to over 349 millions in 2023 (485% increase) number of licensed Rental Apartments (Viviendas con fines turisticos, VFT) in Spain has increased in the same years from 85,000 to over 340,000 (+414%) and over 42,000 in Málaga Province alone which is the province of Spain with the highest number of licensed registered properties for such a destination of use.
The rise of short-term rentals hasn't come without problems. One major issue is figuring out how to regulate this booming industry. Many cities and areas have put rules in place to tackle concerns like neighbourhood disturbances, mass tourism and the shortage of affordable housing. Hosts and rental platforms must deal with a complicated mix of regulations and zoning laws to stay compliant. A long list of restrictions have been introduced in 2024 by the Junta de Andalucia and local Councils (Ayuntamiento) last of which, in Malaga just a few days ago, de facto restricting vigorously any new license issue for the near future.
Despite regulatory challenges, short-term rentals are an inevitable evolution likely here to stay. The sharing economy continues to evolve, with new platforms and business models emerging. Travelers now have more choices than ever, and hosts can generate income by opening their homes to guests. The future of short-term rentals is likely to be shaped by increased sustainability efforts, enhanced technology, and further integration into the broader travel ecosystem.
In an ever changing and challenging environment we strongly recommend property investors to seek proper expert advice if and when looking for investing in a short term rental property to keep into consideration legal and practical aspects relating which can all have major impact in the economics of your investment.
At Holox invest we can help you avoiding any legal or administrative surprise during due diligence and search of the right property.
Do not hesitate to book a free consultation with our experts from the comfort of your home.
What are the benefit of short-term rentals over long-term lets?
There are numerous advantages for short-term or vacation rentals over Long -term lets in Costa del Sol:
· Higher Rental Income:
- Short-term rentals often generate higher income compared to long-term lets, as nightly rates can be significantly higher than monthly rates.
· Flexibility for Owners:
- Short-term rentals allow property owners to use their property for personal use whenever it's not rented out. This flexibility is not possible with long-term lets.
· Diverse Tenant Pool:
- Short-term rentals attract a wide range of guests from different locations and backgrounds, reducing the risk associated with problematic long-term tenants, credit risk, defaults and evictions procedures.
· Maintenance and Upkeep:
- Short-term rentals require regular cleaning and maintenance between guests, helping keep the property in better condition. Long-term lets may suffer from deferred maintenance
· Market Responsiveness:
- Short-term rentals can quickly adjust pricing based on demand, allowing owners to capitalize on peak travel seasons, events, or market trends.
· Tax Benefits:
- In some jurisdictions, there can be favorable tax treatments or deductions available to short-term rental owners that are not available for long-term lets.
· Personal Control:
- Short-term rentals allow owners to regularly inspect their property, ensuring it is being maintained according to their standards.
· Vacation Use:
- Property owners can use the short-term rental as a vacation home for themselves when it is not occupied by guests. This is particularly the case of Costa del Sol, where thanks to short rentals, many non-residents favour purchasing their second home or vacation home, using it for their holidays while letting it to a comprehensive property manager like Holox Invest to monetize when not living in. With our expertise we can guide to choose the area and location more in demand in the touristic market, to get you dream home with a profitable return for your investment on top of it!
· Meeting Diverse Needs:
- Short-term rentals can cater to specific traveler needs, such as providing family-friendly amenities or pet-friendly options, which can attract a broader range of tenants.
· Positive Reviews:
- Positive reviews and ratings from guests can enhance the property's reputation and appeal, leading to increased bookings and potentially higher rental rates. With over 42,000 properties in touristic rentals, competition has grown exponentially. Only a real professional manager focused on top positive reviews, maximising revenues and keeping management costs efficiently can guarantee a successful short-term rental investment in Costa del Sol. At Holox Invest our professional team is dedicated and incentivised to optimise our clients’ investors returns while building up a five-star property profile in all major platforms for long term sustainable success. Arrange a 30-minute free consultation with our experts here to know how.
Embrace the many advantages of short-term rentals investments immersed in the fast growing, exceptional quality of sunny Costa del Sol. Contact us to cover all legal and administrative aspects from our local experts for free.
