Short or long-term rental: what earns your property the most?

You own a property that you do not live in yourself. Perhaps a flat by the sea, a house you inherited or an investment in the city. Then comes the question: do I rent to one long-term tenant, or to tourists by the night?

The answer depends less on figures on a website than on your property, your location and your own situation. In this article we compare both options honestly. We look at revenue, work, costs, risk, wear and tear and regulations. And we look at a middle way that is often forgotten.

The difference at a glance

With long-term rental, you sign a tenancy agreement with one tenant. They live there, pay the same rent every month and usually stay for years. With short-term rental, you host changing guests for a few nights or a week. You rent by the night and the price changes with demand.

Both options have their place. One is not always better than the other.

Revenue: more potential, more fluctuation

Short-term rental has a higher revenue potential. A night let to tourists brings in more than a day's rent from a permanent resident. In a good location and a good season, the difference can be large.

But potential is no guarantee. Your revenue depends on how many nights you rent out and at what price. A busy summer on the coast makes up for a quiet winter. A property in a less sought-after area may never reach that level.

Long-term rental is predictable. You know what comes in every month. The revenue is lower, but it does not fluctuate with the weather, the school holidays or the economy.

So the right comparison is not the highest nightly rate against the monthly rent. Compare what is left after all costs, over a full year.

Work: from little to daily

With a long-term tenant, the work is limited. You find a tenant, draw up a contract, carry out an inventory of the property's condition and follow up the payments. After that, it is mostly about repairs and the occasional question.

With short-term rental, there is work every week. Answering guest messages, often in different languages and at late hours. Arranging check-in and check-out. Scheduling cleaning after every stay. Washing linen or having it washed. Adjusting prices. Following up reviews. Solving small problems when a guest calls to say the heating is not working.

Anyone who does this themselves alongside a busy job often underestimates how much time it takes. It is not passive income, unless someone else takes over the work.

Costs: where the difference disappears

Short-term rental brings costs that barely exist, or do not exist at all, with a long-term tenant:

• Cleaning after every stay, with a deep clean in between
• Linen and towels, including washing, ironing and replacing
• Energy and water, which you usually pay yourself
• Internet, streaming and consumables such as coffee, soap and toilet paper
• Platform fees from Airbnb, Booking.com or Vrbo
• Management, if you outsource the work
• Furnishing and replacement of furniture, crockery and appliances
• Tourist tax, depending on your municipality

With long-term rental, the tenant usually pays for energy, water and internet themselves. You mainly have maintenance, insurance and possibly an estate agent to find a tenant.

So a property with high gross short-term revenue may leave you with less than you think. Do the sums with all the costs included.

Risk: empty nights or a tenant who does not pay

Every rental model has its own risk.

With short-term rental, vacancy is the biggest risk. A quiet month, a bad season or a new competitor in the street means nights without revenue. The risk is spread: one guest who does not come is a lost night, not a lost year.

With long-term rental, the risk is concentrated. One tenant who does not pay can cost you months of income. A procedure to get a tenant out of the property takes a long time. At the same time, a good tenant gives you years of peace of mind.

Which risk you prefer is a personal choice. Some owners sleep better with a fixed rent. Others prefer to spread it over many small bookings.

Wear and tear and maintenance

Many changing guests means more wear and tear. Suitcases against walls, sand in the floor, intensive use of the kitchen and bathroom. You replace textiles, crockery and small appliances sooner.

On the other hand, a holiday home is checked after every stay. Problems are spotted quickly. With a long-term tenant, you sometimes do not see the inside of the property for years, and only notice damage when they leave.

Flexibility for your own use

Here short-term rental has a clear advantage. If you want to stay in your coastal flat yourself for a few weeks, you simply block that period in the calendar. With a long-term tenant, you cannot. For the length of the contract, the property is someone else's home.

If you later want to sell the property or move in yourself, tourist rental also gives you more flexibility. There is no running tenancy agreement that you have to respect.

The rules differ widely

In Flanders, long-term rental of a main residence falls under the Flemish Residential Tenancy Decree (Woninghuurdecreet). That decree protects the tenant. Among other things, it sets how long a contract runs, how you can terminate it and which quality standards the property must meet.

Tourist rental falls under the Flemish Accommodation Decree (Logiesdecreet). You register the property with Toerisme Vlaanderen (Visit Flanders' tourism authority), you need a fire safety certificate and you have to adapt your insurance. In addition, some municipalities have their own rules, and there is often a tourist tax.

The two options can also be treated differently for tax purposes. Exactly how depends on your situation. Discuss it with your accountant before you make a choice.

The middle way: medium-term rental

Between one night and several years lies a market that is often overlooked. Think of stays from a few weeks to a few months:

• Expats who have just arrived in Belgium and are looking for a home
• Consultants or technicians on a project nearby
• People who need a home temporarily during a renovation
• Business stays for companies bringing in staff

Medium-term rental combines part of the revenue of short-term rental with fewer changeovers and less work. Which rules apply then depends on the length and type of stay. Get proper advice on this before you start.

Does short-term rental suit your property?

Not every property is suitable for tourists. To be honest, it works well mainly when a number of things come together:

• A location where tourists or business travellers want to go
• A property that looks attractive in photos and is comfortably furnished
• A building or neighbourhood where rental is allowed and does not cause a nuisance
• An owner who is willing to invest in furnishing and follow-up

An ordinary flat in a residential area without tourist attractions often does better with a long-term tenant. A spacious property by the sea or in a sought-after city, on the other hand, has more potential as a holiday home.

An estimate for your property

Would you like to know what your property could earn in short-term rental, and what is left after costs? YourDomi makes an honest estimate based on market data for your location. If short-term rental does not suit your property, we will tell you that too. Request a personal proposal.