TL;DR: Short-term vacation rentals can generate higher gross income than long-term lets, but come with greater management effort, inconsistent occupancy, stricter regulation, and different tax treatment. Long-term rentals offer stability, lower management burden, and predictable income.
The rise of platforms like Airbnb, Vrbo, and Booking.com has made short-term rental an accessible option for property owners in many markets. But the comparison with long-term renting is not as simple as "short-term earns more." Understanding the full picture — regulation, tax, management effort, and risk — is essential before making the decision.
This guide compares vacation rental and long-term tenancy for landlords in the UK, France, Sweden, Australia, New Zealand, Canada, and the USA.
MmowW Scrib🐮 is a document preparation service, not a law firm. We do not provide legal advice.
| Category | Description |
|---|---|
| Short-term vacation rental | Property let for days or weeks at a time, typically through Airbnb, Vrbo, or Booking.com. No tenancy agreement; hospitality service model. |
| Long-term tenancy | Property let for 6 months or more under a formal tenancy agreement. Covered by residential tenancy law. |
| Mid-term rental | Property let for 1–6 months. Increasingly popular with travelling workers, relocating professionals. May fall between the regulatory frameworks. |
Gross income potential differs significantly by market:
| Market | STR Nightly Rate (2-bed, city centre) | Long-term Monthly Rent | STR Annual (70% occupancy) | Long-term Annual |
|---|---|---|---|---|
| London, UK | £150–£250 | £2,500–£3,500 | £38,325–£63,875 | £30,000–£42,000 |
| Paris, France | €150–€250 | €2,000–€3,000 | €38,325–€63,875 | €24,000–€36,000 |
| Sydney, Australia | A$200–$350 | A$3,000–$4,500 | A$51,100–$89,425 | A$36,000–$54,000 |
| New York, USA | $200–$400 | $3,500–$5,000 | $51,100–$102,200 | $42,000–$60,000 |
Important caveats:
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Try it free →Regulation of short-term rentals has tightened significantly across all seven jurisdictions:
| Country | STR Regulation | Key Restrictions |
|---|---|---|
| 🇬🇧 UK | Permitted development right: London 90-day limit per year for entire property STR | Scotland: planning permission required; nationwide registration scheme proposed |
| 🇫🇷 France | Mandatory registration number for STRs; Paris primary residence: 120 days/year limit | Secondary residence: subject to change of use consent; Paris fines up to €50,000 |
| 🇸🇪 Sweden | STR generally permitted; HOA/leasehold rules may prohibit | Tenant subletting on Airbnb without permission is a lease breach |
| 🇦🇺 Australia | State-by-state regulation; NSW: 180-day limit in Greater Sydney for entire property | VIC: no formal cap; ACT: up to 90 days self-registration |
| 🇳🇿 New Zealand | Council consent may be required; resource consent for change of use | Auckland: unitary plan restrictions apply |
| 🇨🇦 Canada | Toronto, Vancouver: STR only in primary residence; registration required | Montreal: STR requires classified establishment number |
| 🇺🇸 USA | Highly variable by city; New York City's Local Law 18 (2023) effectively bans entire-home Airbnb | San Francisco, Los Angeles, others have strict registration and occupancy requirements |
Sources:
| Factor | Short-Term Rental | Long-Term Tenancy |
|---|---|---|
| Guest/tenant changeover | Multiple per month | Once every 1–3 years |
| Cleaning | After every stay | Periodic; deep clean at move-out |
| Maintenance urgency | Higher — guests expect instant response | Normal; within 24–72 hours |
| Marketing | Continuous; dynamic pricing management | Periodic; only at vacancy |
| Guest communication | Daily | Monthly (rent collection) or as needed |
| Review management | Critical; rating affects occupancy | N/A |
| Peak/off-peak management | Significant seasonality | Stable year-round |
For landlords with limited time, long-term tenancy is significantly lower effort. STR effectively operates as a hospitality business.
Mid-term rentals (corporate/professional lets of 1–6 months) offer a middle path:
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MmowW Scrib🐮 is a document preparation service, not a law firm. We do not provide legal advice. For regulatory advice on short-term rental in your area, consult your local authority and a specialist property solicitor.
Q: Can I switch from long-term to short-term rental mid-tenancy?
A: No — the tenant has a tenancy agreement that gives them the right to occupy the property for its duration. You cannot convert the property to short-term use while a tenancy is in force. You would need to end the tenancy lawfully (with proper notice and grounds where required) before changing the use.
Q: Does my homeowner's insurance cover short-term rental guests?
A: Almost certainly not. Most homeowner's and landlord insurance policies explicitly exclude commercial short-term rental activity. You need specialist short-term rental insurance (e.g., Airbnb's AirCover provides some protection but is not a substitute for comprehensive coverage). Consult an insurance broker before listing.
Q: What are the planning permission implications of running a short-term rental?
A: In Scotland, planning permission is now required for short-term lets. In some English local authorities and French communes, a formal change of use from residential to holiday accommodation is required. In the USA, zoning regulations may prohibit STR in residential zones. Check with your local planning authority before committing.
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