Short-term vs. long-term rentals: Which suits you better?

If your second home is vacant and does not generate any income, the decisive question quickly arises: Should you rent it out as a long-term rent or would you rather rent it out to travelers at short notice? Both options have their pros and cons. In this article, we'll analyze both models and help you make a decision.

Short-term rental: The opportunity for higher returns

Definition and characteristics

Short-term rental means renting to guests for stays of a few days to a few weeks. Typical platforms include Airbnb, Booking.com or VRBO.

Benefits of short term rentals

Higher income

The biggest advantage: Significantly higher daily rates than long-term rentals.

•Berlin Mitte: 80-150€ per night vs. 25-35€ per day for long-term rentals

•Munich city center: 100-200€ per night vs. 30-45€ per day for long-term rentals

•Hamburg: 70-120€ per night vs. 20-30€ per day for long-term rentals

Flexibility

•Own use possible

•Prices can be adjusted to demand

•Instant availability for your own use

Tax benefits

•Many costs deductible (cleaning, equipment, marketing)

•Depreciation options

•Small business regulation possible

Disadvantages of short term rentals

A lot of manual work

•24/7 guest service

•Cleaning after each guest

•Booking management

•Marketing and price adjustment

Fluctuating workload

•Seasonality

•Unpredictable vacancy periods

•No guaranteed income

Legal complexity

•Notification requirements

•Approval process

•Tax particularities

•Liability issues

Higher costs

•Cleaning: 40-80€ per guest

•Wear and tear due to frequent use

•Insurance

•Administrative costs

Long-term rental: predictable income

Definition and characteristics

Long-term letting means renting to tenants for at least six months, usually for an indefinite period of time.

Benefits of long-term rentals

Predictable income

•Fixed monthly rent

•Long-term contracts

•Calculable return

Low time required

•Unique tenant search

•Minimal administrative effort

•No daily care

Less wear

•Gentle use

•Infrequent tenant changes

•Lower renovation costs

Legal simplicity

•Clear tenancy regulations

•No special permits

•Easy for tax purposes

Disadvantages of long-term rental

Lower return

•Lower daily prices

•No dynamic pricing

•Limited opportunities for improvement

Less flexibility

•No personal use possible

•Protection against dismissal for tenants

•Long-term commitment

Risk of loss of rent

•Payment defaults are possible

•Eviction lawsuits are time-consuming

•Tenant damage

Comparing returns

Berlin calculation example (2-room apartment, 60 sqm)

Short term rental:

•Average price: 95€/night

•Capacity: 65% (237 nights/year)

•Gross income: 22,515€/year

•Costs (cleaning, administration, marketing): 6,755€

•Net income: 15,760€/year

Long term rental:

•Cold rent: 1,100€/month

•Annual rent: 13,200€

•Landlord's additional costs: 800€

•Net income: 12,400€/year

Yield difference: +27% for short term rentals

Important: With short-term rentals, income fluctuates significantly!

Decision-making aid: What suits you?

Short-term rental is ideal when:

•You have time to actively manage

•You're looking for higher returns

•You are not afraid of legal complexity

•You would like to use the apartment yourself from time to time

•You rent out in an attractive tourist location

Long-term rental is suitable if:

•You prefer passive income

•You have little time for administration

•You need predictable income

•You value legal simplicity

•The location is less attractive for tourists

Combination of both models

Flexible model

Some landlords combine both approaches:

•Summer months: short term rental

•Winter months: furnished long-term rental

•Customizable according to demand

Mixed use

•Main apartment: occasional short term rental

•Additional apartments: long term rental

Professional management as a solution

If you want to take advantage of the higher returns of short-term rentals but don't want to spend the time, professional management is the solution.

Arbio does it for you:

•Complete guest services

•Cleaning after every stay

•Booking management

•Price optimization

•Marketing across all platforms

•Legally secure registration

Your benefits:

•Returns as with active self-government

•Time required as with long-term rentals

•Professional service for guests

•Legal certainty

Market situation 2025

Short term rental

•Demand for individual accommodation continues to grow

•Tightening regulation in many cities

•Professionalization of the sector

Long term rental

•Continuing housing shortages

•Stable rental demand

•Rent brake in many cities

Conclusion: The right choice for your situation

The decision between short and long-term rentals depends on your personal goals, available time and willingness to take risks.

Short-term rental offers:

•Higher returns (20-40% more)

•Flexibility

•Self-use option

•But: More effort and risk

Long-term rental offers:

•Predictable income

•Little time required

•Legal simplicity

•But: Lower returns

With professional management, you can combine the advantages of both models: High returns on short-term rentals with minimal investment of time.

Let Arbio advise you which model is best for your property. We analyse your situation, equipment and goals and develop the best strategy for maximum return with minimum effort!

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