So, you’ve bought (or are thinking of buying) a property in Spain and now you’re pondering how to maximize rental income. The classic question arises: should you do short-term rentals (Airbnb-style vacation lets) or opt for long-term tenants? The landscape in 2026 for rentals has evolved with new laws, market shifts, and post-pandemic trends. It’s time for a reality check on short-term vs. long-term rentals in Spain – cutting through hype to see what strategy makes sense for you now.
The Allure of Short-Term Rentals – and What’s Changed
For years, renting out your Spanish home to vacationers seemed like a goldmine. In tourist hotspots, nightly rates can far exceed a pro-rated monthly rent. A beach apartment in Marbella might fetch €150 a night in summer, whereas a long-term tenant might pay €1,000 a month – you can see the appeal. However, 2026’s short-term rental market is not the free-for-all it once was. Key realities:
- Record Tourism, High Demand: First the good news – Spain remains a tourism titan. 2024 saw 94 million international arrivals, surpassing pre-pandemic records. 2025 continued strong. That means the demand for holiday accommodation is robust. In coastal areas and cities like Barcelona, tourists are willing to pay premium rates for well-located apartments. If you can legally rent short-term, peak season returns are juicy. Many owners achieve occupancy rates and yields that outperform long tenancies, at least in summer. Plus, you have the flexibility to use the property yourself in off-peak times, a perk for lifestyle investors.
- New Regulations (National and Local): Now the not-so-good news. Spain has rolled out major new regulations on short-term rentals to tackle housing shortages and neighbor nuisances. As of mid-2025, a national decree (Royal Decree 933/2021 and an April 2025 law update) requires all short-term rental properties to register with a national Tourism Registry and, critically, obtain permission from the community of owners (HOA) if in a multi-unit building. Practically, this means if your apartment is in a condo building, you need a vote of the owners (60% approval) to allow tourist lets. If you rent without that and a neighbor complains, you risk hefty fines (up to €30,000 for first offense, and astronomically up to €600,000 for continued violation in some regions). That is a game-changer. Some communities readily approve rentals (especially in holiday complexes), but others have banded together to ban them, valuing peace and security.
- Licensing and Zones: Many regions/cities also have their own rules. Barcelona, for example, has long banned new short-term rental licenses in the city core – you can only do tourist rentals if you grandfathered a license. Madrid has zoning restrictions. The Valencia region now gives HOAs power to forbid holiday lets since 2025. The Balearic Islands have a license quota – and some areas outright prohibit apartment rentals to tourists. The upshot: before banking on Airbnb income, ensure it’s legal in your property’s location and you can get the required license. The era of “just list it and see” is over – Spain is serious about regulating this sector.
- Operational Intensity: Short-term renting is essentially running a hospitality business. Frequent guest turnover, marketing, cleaning, maintenance, handling guest messages at 10pm about the Wi-Fi… If you don’t live locally, you’ll likely need a property manager or Airbnb management company, which can charge 20-30% of rental revenue. Those extra costs and effort eat into the profit. Post-COVID, guests also expect high standards of cleanliness and amenities (good Wi-Fi is a must, perhaps a workspace, etc., especially with many “workcationers” these days). So factor in higher furnishing and utility costs – you pay those utilities, not the guest.
Reality check for short-term (2026): It can still be very profitable, especially in high-tourism locales or unique properties (villas, etc.). But it’s no longer easy money. You must navigate licences and community approval, comply with stricter laws (including providing guest IDs to authorities, noise rules, etc.), and work harder for each euro. Many owners are realizing that the short-term route now carries higher regulatory risk and effort.
The Case for Long-Term Rentals – Stability and Surging Demand
Long-term rentals (typically defined as tenancy agreements 12 months or more, governed by Spain’s Urban Lease Law) might lack the glamour of vacation lets, but they offer stability. And right now, Spain has a rental housing crunch that is driving long-term demand through the roof:
- Soaring Rental Prices: Spain’s rental market is on fire – ironically, partly because so many properties went to short-term or were sold, reducing supply for residents. In 2024, rents jumped about 11.5% nationally, hitting all-time highs. Cities like Barcelona and Madrid have seen even higher spikes over the past five years (despite some rent controls temporarily). There’s intense demand from locals and the growing expat population for decent long-term rentals. Case in point: an analysis found the number of long-term rentals available is down sharply (some sources say 40-50% drop in supply in major cities compared to pre-2018), while demand is up. Bidding wars for rentals are not unheard of; an Idealista report noted in late 2024, 17% of rentals were snapped up within 24 hours of listing. For landlords, this means high occupancy and the ability to choose solid tenants from many candidates.
- Steady Income, Fewer Surprises: With a long-term tenant, you get a consistent paycheck each month, and you’re not dealing with constant turnover. Especially if you snag a good tenant (and Spain has plenty of reliable tenants looking for homes), you might have a multi-year low-stress arrangement. This is increasingly attractive when weighed against the complexities of short-term. Additionally, you shift utility costs to the tenant (in Spain, typically the renter pays electricity, water, internet), saving you money and hassle. You also don’t need to fully furnish (unfurnished rentals are common for locals; though you can often charge a premium for furnished aimed at expats).
- Legal Changes Affecting Long-Term: It’s not all rosy – landlords have some constraints. Spain’s new Housing Law (in effect from 2023/2024) aimed to protect tenants. Notably, for existing contracts, rent increases were capped at 2% in 2023 and 3% in 2024, and from 2025 onward a new index (likely lower than inflation) will govern raises. So you can’t raise rent willy-nilly on a sitting tenant anymore. Also, standard leases give tenants the right to stay up to 5 years (if landlord is individual) or 7 years (if a company) at the same rent (with annual adjustments only by that index) – they can leave earlier with notice, but you as owner generally can’t kick them out before 5 years except in specific cases (like needing the home for yourself, with 6 months notice, and only after year one). This means when you go long-term, think of it as a semi-commitment; you won’t easily regain possession to switch tactics if you change your mind. Some owners see that as a downside.
- Eviction Fears: Ask any Spanish landlord and they’ll mention the dreaded scenario: a non-paying tenant who is hard to evict. Yes, Spain’s eviction process for non-payment can be slow (often 6+ months legally, though reforms have tried to speed it). It’s a risk, but mitigated by careful tenant screening and even insurance (there’s rental insurance that covers non-payment). The reality is the majority of tenancies go just fine. But it’s true, an Airbnb guest not paying isn’t a thing – while a long-term tenant not paying could become a legal headache. By law, you also can’t simply cut off utilities or lock them out – that’s illegal. However, with the current high demand, you can afford to be choosy with tenants (require proof of income, or target renting to expats via relocation agencies who pre-vet, etc.).
Reality check for long-term (2026): The pendulum in Spain is swinging toward encouraging more long-term rentals. The government wants owners to rent long-term to increase housing supply for locals, hence the various measures. From an investor perspective, long-term yields have improved due to rent rises. For example, cities like Valencia or Málaga offer gross yields of 5-6% on long-term rentals, which is quite decent, and you get nearly year-round occupancy with minimal effort after move-in. There’s also a new trend: mid-term rentals (stays of 1-6 months) to digital nomads or snowbirds, which sort of blend both worlds (often higher rent than year-long, but not nightly turnover) – something to consider if you want flexibility.
Which Strategy Wins in 2026?
It really depends on your property type, location, and personal situation:
- If you own in a prime tourist spot (beachfront condo, city center apartment in Sevilla, etc.) and you can legally do short-term, you might still earn more going the vacation rental route, especially during peak summer and holiday seasons. For instance, a coastal villa could net as much in 8 high-season weeks as a year-long tenant would pay in 12 months. But factor in off-season vacancy – many areas can’t get tourists year-round. One pro tip some owners do: short-term in summer, then secure a winter long-term tenant (like a retired couple from abroad or a digital nomad) for 3-6 months in the low season. This hybrid approach smooths income and keeps the place occupied.
- If your property is in a city or non-touristy town where tourist demand is limited or licensing is an obstacle, long-term is likely the way to go. In fact, you may have no choice due to regulations. But the good news is, urban rents are high. For example, average long-term rent in Barcelona now tops €20/m² – meaning a 50m² flat can fetch €1,000+ a month. And there’s a waiting list of tenants. So you’ll enjoy strong income with far less management. Barcelona and other “stressed” areas do have rent controls for new contracts in the future (if declared a stressed zone, new contracts for big landlords might have to match previous rent, etc., as per the Housing Law). Even so, demand outstrips supply, so vacancy risk is nearly zero.
- Risk tolerance and involvement: Short-term is higher reward, higher effort/risk. Long-term is more set-and-forget income but with lower peak yields. Are you living nearby or abroad? If abroad, do you have a trusted agent to handle short-let turnover? Many clients of ours who initially leaned toward Airbnb later switched to long-term after experiencing the hassle or hitting regulatory walls. By 2026, we see a noticeable shift: some investors are pivoting to long-term because the “Airbnb party” while not over, has certainly quieted down from its heyday.
- Community and personal use: If your community of neighbors is against tourists (common in residential complexes), respect that – forcing through short-term rentals can make life unpleasant. Also, if you want personal use of your property frequently or unpredictably, short-term might suit you (you just block off your dates). With a long-term tenant, you can’t pop in on a whim – it’s their home. However, note that if you rent long-term and later want to use the property yourself, you can only terminate after the first year by giving 2 months’ notice and only if you or immediate family need to occupy it (must be in contract clause) – so plan accordingly.
The 2026 reality: Many savvy owners are taking the path of least resistance: long-term (or medium-term) rentals for consistent, policy-friendly income. Short-term is still great for tourist properties, but it’s become a professional endeavor needing careful compliance. It’s no longer an easy side hustle; think of it as a hospitality business with all the pros and cons therein.
Conclusion: Find Your Balance
There isn’t a one-size-fits-all answer – it’s about aligning with market reality and your goals. We recommend evaluating: What are the net yields after all costs? Can you legally do short-term, and for how many months of high occupancy? How much time or management fee are you willing to spend? And importantly, what’s your stress tolerance for regulation and tenant issues? For a “armchair investor” who values peace of mind, a long-term rental in Spain’s current market is very appealing: high demand, rising rents, and you contribute to local housing needs (earning you some karma points). For a “maximizer” who has a great vacation property and the means to manage it tightly, short-term can still deliver better annual returns, especially if you optimize occupancy year-round by targeting off-season travelers (digital nomads on 1-month stays, etc.). At Costa Dream Home, we help property owners strategize the best rental approach. We crunch the numbers with you, discuss the latest laws in your area, and even assist in securing reliable tenants or connecting with reputable rental management services. The Spanish rental market is dynamic – but whether you choose short-term or long-term, our aim is to help you turn your property into a rewarding investment without nasty surprises. Reach out to us for a personalized rental ROI analysis. With realistic insights (no hype), we’ll ensure your Spanish property works for you in 2026 and beyond, whichever rental path you tread.
