Airbnb vs Long-Term Rental in Spain: Which Makes More Money?

The Headline Numbers: Airbnb Earns More — Or Does It?

On the surface, the case for short-term holiday rentals is compelling. A two-bedroom apartment in Estepona that rents long-term for €1,000/month (€12,000/year) can earn €120-€180/night on Airbnb during summer. If you achieve 160 nights of bookings at an average of €140/night, your gross annual income is €22,400 — nearly double the long-term rental. This 30-50% premium is the number estate agents love to quote.

But gross income is a vanity metric. The real question is: what do you keep after costs? And when you run the numbers honestly, the gap between short-term and long-term narrows dramatically — and in some cases reverses entirely.

The True Cost of Running an Airbnb in Spain

Short-term rental income comes with significantly higher operating costs than most investors anticipate. Let's itemise every cost for our €300,000 Estepona apartment:

Management Fees

Unless you live locally and want a full-time job managing your rental, you need a property management company. Typical fees: 18-25% of rental income (inclusive of guest communication, key handover, and coordination). On €22,400 gross income, that's €4,000-€5,600. Some managers charge a flat monthly fee (€200-€350) plus per-booking fees — do the maths to compare.

Cleaning and Laundry

Every guest changeover requires professional cleaning and linen change. Cost: €50-€80 per turnover for a two-bedroom apartment. With 40-50 bookings per year (average stay of 3.5 nights), that's €2,000-€4,000 annually. Some hosts add a cleaning fee to the listing (€40-€60), but this reduces your competitiveness and booking rate.

Furnishing and Setup

Holiday guests expect a higher standard than long-term tenants. A full Airbnb-ready furnishing package costs €8,000-€15,000 for a two-bedroom apartment — beds, sofas, kitchen equipment, linens, towels, decorative items, smart TV, WiFi router, welcome packs. This needs refreshing every 3-5 years, giving an annualised cost of €2,000-€4,000.

Platform Commissions

Airbnb charges hosts 3% commission on each booking (or 14-16% if you use their split-fee model). Booking.com charges 15%. If you diversify across platforms, budget 5-10% of gross income: €1,100-€2,200.

Utilities

You pay electricity, water, WiFi, and Netflix/streaming year-round — even when the property is empty. Air conditioning during summer months is a significant cost. Budget €200-€350/month = €2,400-€4,200 annually. Long-term tenants pay their own utilities.

Maintenance and Wear

Holiday guests are harder on properties than long-term residents. Higher turnover means more plumbing callouts, appliance failures, and general wear. Budget 8-12% of gross income for maintenance: €1,800-€2,700.

Tourist Licence Costs

You need a Vivienda con Fines Turisticos (VFT) licence. The application itself is free in Andalusia (just a responsible declaration), but compliance requires: a first-occupation licence or equivalent, energy performance certificate (€150-€300), safety inspection, complaint forms, and tourist information sheets. Some older properties need works to comply: fire extinguishers, emergency lighting, safe box. Budget €500-€1,500 for initial compliance, plus ongoing renewal costs.

The True Cost of Long-Term Rental

Long-term rental is operationally much simpler. Your costs for the same €300,000 apartment:

Management

Optional. Many landlords self-manage long-term rentals, even from abroad, using a local gestor for paperwork. If you use an agent: one month's rent as a finding fee (€1,000) plus 5-8% monthly management (€600-€960/year). Total: €1,600-€2,000 in year one, €600-€960 in subsequent years.

Furnishing

Long-term rentals can be offered unfurnished (most common in Spain for Spanish tenants) or furnished to a basic standard. Furnished: €4,000-€7,000 setup cost, refreshed every 7-10 years. Annualised: €500-€1,000.

Maintenance

Lower turnover means less wear. Budget 3-5% of annual rent: €360-€600.

Insurance

Landlord insurance: €200-€400/year. Less than holiday rental insurance (€400-€700/year) because risk is lower.

Void Periods

Budget for one month vacant per year when tenants change: €1,000 lost income.

The Net Income Comparison

Let's put it all together for our €300,000 two-bedroom Estepona apartment:

Airbnb (Short-Term Rental):

• Gross income: €22,400
• Management (22%): -€4,928
• Cleaning (45 turnovers x €65): -€2,925
• Furnishing (annualised): -€2,500
• Platform fees (6%): -€1,344
• Utilities: -€3,200
• Maintenance (10%): -€2,240
• Insurance: -€550
• Net income before tax: €4,713
• Net yield on purchase: 1.6%

Long-Term Rental:

• Gross income: €12,000 (€1,000/month)
• Management (8%): -€960
• Furnishing (annualised): -€700
• Maintenance (4%): -€480
• Insurance: -€300
• Void period (1 month): -€1,000
• Net income before tax: €8,560
• Net yield on purchase: 2.9%

The surprise: In this realistic scenario, the long-term rental actually generates higher net income despite gross revenue that's 46% lower. The operational costs of short-term rental consume the revenue premium almost entirely.

When Airbnb Does Win

The calculation above assumes average performance. Airbnb outperforms when:

• You self-manage locally: Eliminating the 18-25% management fee transforms the numbers. If you live nearby and handle guest communication, key handover, and cleaning coordination yourself, net income jumps to €8,000-€10,000.
• Premium properties: Luxury villas and unique properties (penthouses with sea views, historic townhouses) command nightly rates of €250-€500+ that make the operational costs proportionally smaller.
• Exceptional locations: Front-line beach, old town charm, or walking distance to major attractions command premium occupancy and rates that justify the operational overhead.
• You optimise aggressively: Dynamic pricing tools (PriceLabs, Beyond Pricing), multi-platform distribution, exceptional guest experience (leading to repeat bookings and direct reservations), and off-season marketing can push occupancy above 200 nights and average rates above €160.

The Legal Landscape: Tightening Fast

This is perhaps the most important consideration for 2026 and beyond. Spain's tourist rental regulations are evolving rapidly, and the direction is consistently towards restriction.

Tourist licence requirements (Andalusia): All short-term rentals (less than 2 months) require a VFT licence registered with the Junta de Andalucia. Operating without one risks fines of €2,000-€18,000 for minor infractions and up to €150,000 for repeated violations.

Community of owners restrictions: Since the April 2025 reform of the Ley de Propiedad Horizontal, communities of owners can vote to restrict or prohibit tourist rentals with a three-fifths (3/5) majority. This is a major change that has made it harder to obtain new VFT licences in apartment buildings. This means an apartment you buy today with a tourist licence could potentially lose the ability to rent short-term if your neighbours vote against it. This is a growing risk in buildings with high tourist rental density where permanent residents are fed up with noise and revolving-door guests.

Municipal restrictions: Several Costa del Sol municipalities have imposed or are considering zoning restrictions that limit tourist rentals to certain areas or building types. Malaga city has introduced tourist rental saturation zones where no new licences are issued.

Tax Differences: Short-Term vs Long-Term

The tax treatment differs significantly:

Non-resident landlords (short-term): Taxed at a flat 19% on gross income (EU/EEA residents) or 24% (non-EU/EEA, including UK post-Brexit). Limited deductions available — EU residents can deduct directly related expenses; non-EU residents technically cannot deduct any expenses under current rules, making the effective tax rate very high.

Non-resident landlords (long-term): Same rates apply (19% or 24%), but periods when the property is vacant attract an imputed income tax of 1.1-2% of the cadastral value — typically €200-€500/year.

Resident landlords (long-term): Significant advantage. Long-term rental income (contracts over 12 months) qualifies for a 50-60% reduction in the tax base. This means if you earn €12,000 in long-term rental income, you may only pay tax on €4,800-€6,000 of it. This reduction is NOT available for short-term rentals.

Tenant Protection: The Long-Term Rental Risk

Spain's tenant protection laws are among the strongest in Europe, and this is the primary risk of long-term rental:

• Minimum contract duration: 5 years (or 7 if the landlord is a company). Even if you sign a one-year contract, the tenant has the right to extend annually up to 5 years.
• Rent increases: Capped during the contract period, previously linked to CPI but now subject to the government's reference index (around 2-3% in 2026).
• Eviction process: If a tenant stops paying rent, the legal eviction process takes 6-18 months in practice, during which you receive no income but cannot access your property. Spanish courts are extremely protective of tenants, particularly families with children or vulnerable individuals.
• Squatter risk: While overstated in the media, Spain's squatter (okupa) laws do make it difficult to remove someone who has occupied your property for more than 48 hours. This is primarily a risk for properties left empty for extended periods.

The Hybrid Strategy: Best of Both Worlds

Increasingly, smart investors on the Costa del Sol are adopting a hybrid approach: short-term rental during peak season (June-September) and medium-term rental during the off-season (October-May).

How it works:

• Summer (4 months): Airbnb at €150-€200/night, achieving 85-95% occupancy = €15,000-€22,000
• Winter (8 months): Medium-term rental to remote workers, digital nomads, or winter-sun retirees at €1,000-€1,500/month = €8,000-€12,000
• Total gross: €23,000-€34,000

The advantages: maximum summer revenue when demand peaks, stable off-season income without the empty-property costs, reduced management burden (fewer turnovers), and medium-term tenants (1-6 months) don't trigger the 5-year minimum contract duration of standard long-term leases.

The catch: You need a tourist licence for the summer portion, and the property must be furnished to holiday-let standard year-round. Medium-term tenants may also be harder to find outside prime locations — this strategy works best in Malaga city, Marbella, and Estepona where remote worker demand is strong.

Which Areas Suit Which Strategy

Best for Airbnb: Marbella old town, Estepona old town, Nerja (Balcon de Europa area), Malaga city centre, front-line beach properties anywhere on the coast. These locations command premium nightly rates that justify the operational costs.

Best for long-term rental: Fuengirola (large resident expat community), Malaga city (university and tech worker demand), Torremolinos (affordable and well-connected), and any property more than 10 minutes' walk from the beach or town centre.

Best for hybrid: Estepona new town, Benalmadena coast, La Cala de Mijas, and Malaga east (Pedregalejo/El Palo). These areas have strong summer tourist demand and growing remote worker communities for off-season lets.

The bottom line: there is no universal "best" strategy. The right approach depends on your property's location, your involvement level, your tax residency, and your risk tolerance. Run the numbers for your specific situation before committing to either path.