Short-term vs. long-term rental - Pros & cons of both
Short-term rental and long-term rental are two modes of tenancy that differ mainly in terms of the duration of the contract and certain legal, tax and management specificities. Here is a comparison of the two:
Short Rent
Duration:
Generally, a short lease has a duration ranging from a few days to a maximum of 30 days, but can extend up to 6 months in some contexts.
Purposes:
Usually used for tourism, business trips, temporary stays.
Management:
Often managed through online platforms such as Airbnb, Booking.com, etc.
May require more intensive management due to frequent rotation of tenants.
Legal aspects:
In Italy, regulated by Legislative Decree 50/2017, which introduced specific rules for short-term rentals.
Obligation to register guests with the police for security reasons.
Fiscal aspects:
Income is subject to taxation, with the possibility of applying the 21% flat rate on income from short rentals.
Pros and Cons:
Pros: Higher earnings potential compared to long-term rentals, flexibility in the use of the property.
Cons: More management effort, possible variability in earnings, potential problems with local regulations.
Long-Term Rental
Duration:
Generally longer than 6 months, often with contracts of 1 year, 3 years, or 4 years, renewable.
Purposes:
Used for permanent residences, often for families, students, or workers seeking permanent accommodation.
Management:
Less demanding than short rentals, with less tenant rotation.
Requires maintenance and management of long-term relationships with tenants.
Legal aspects:
Regulated by Law 431/1998 in Italy, which sets out the rights and duties of landlords and tenants.
Requires registration of the contract with the Agenzia delle Entrate.
Fiscal aspects:
Income is subject to taxation, with the possibility of applying the cedolare secca (10% or 21% as applicable).
Possible tax deductions for owners.
Pros and Cons:
Pros: Stability of income, less need for frequent management, more stable relationships with tenants.
Cons: Potentially lower income compared to short-term rentals, less flexibility in the use of the property, possibility of difficulties in changing tenants.
The choice between short-term and long-term rental depends on various factors, including financial goals, availability of time for management, location of the property and local regulations. Long-term rentals offer stability and require less management, but may involve lower income and less flexibility.
Short-term rentals may offer higher income but require more management effort and knowledge of local laws. For these reasons, we recommend a trusted and experienced property manager such as Beahost Rentals, who will take care of the cons for you in a professional and careful manner…leaving you alone with the pros of short term rentals.
Contact us by email to get to know us! info@beahost.net
