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The benefits of long-term vs short terms rentals

The benefits of long-term vs short terms rentals

Short-term rentals seem attractive as they generate higher gross rental income compared to long-term rentals.

However, it’s important to remember that short-term rentals come with significant higher costs that are borne by the tenant in long-term rentals:

  • Property management : managing bookings, check-ins, check-outs, cleaning, etc. is time-consuming. Property management fee for short-term rentals usually range between 20-25% of the gross income.
  • Maintenance costs: Frequent repairs and maintenance due to accelerated wear and tear.
  • Utilities: Electricity, gas, internet, and property taxes are often included in the rental price and thus paid by the landlord. For long term rentals these expenses are paid by the tenant.

When it comes to comparing “net” rents (i.e., after deducting all costs from gross rents), the difference in profitability between the two types of rentals is significantly smaller.

Moreover, long-term rentals offer real advantages such as more predictable income due to tenant stability and better property maintenance by the occupant. Long-term rentals provide landlords with greater peace of mind.

Short term rentals are being increasingly regulated and many owners are not familiar with the numerous requirements that need to be met and violators face increasingly substantial fines from Mairie de Paris (Paris City Hall).

  • Registration: Owners must register with the Paris City Hall to obtain a permit.
  • Rental Duration: Short-term rentals are limited to 120 days per year if the property is the owner’s primary residence. Mairie de Paris is advocating for a reduction of this limit to 30 days per year.
  • Non-Primary Residences: Seasonal rentals are prohibited if the property is not the owner’s primary residence. Authorization may be granted if (i) Mairie de Paris approves a change of use to touristic furnished rental and (ii) a “commerciality” fee is paid (in practice, this fee significantly reduces the financial benefits of short term rentals).
  • Co-ownership / condominium regulations: Some co-ownership regulations require the approval of the General Assembly to accept short term rentals.

As for other major cities, Mairie de Paris is less and less lenient towards offenders. Owners not complying with regulations are liable to severe penalties.

Due to a housing shortage, the French government might make the rules and taxes for short-term rentals much tighter in 2025 in order to encourage owners to bring their property on the long term rental market.