Short-term or long-term rental: what actually stays in your pocket

Two flats of similar value, in the same city, can give their owners wildly different annual results. You will not see it in the listings. Similar floor area, similar standard, similar price per night or per month - everything checks out. The difference only shows up after twelve months, when you add up everything that came in and subtract everything that went out. In conversations with owners using tenanto the same pattern keeps coming back: we remember the rent because it arrives as a single transfer, while costs scattered over time slip our minds.

Gross revenue is not the owner’s profit

Let us start by separating three things that blur into one in everyday conversation. The first is the rate - the amount per night or per month, the one from the listing. The second is revenue after occupancy, meaning how much actually came in. The third is the result after costs, and only that one says anything about profitability. Yet owners comparing rental models usually put the first number against the first number, then decide as if they had compared the third against the third.

Scattered costs are treacherous, because one by one they look like trifles. Cleaning after a stay, replacing worn-out bedding, light bulbs, floor cleaner, the platform commission deducted at payout, two vacant days between bookings, a plumber in November. On its own, none of these hurts. Added up over a year, they can eat most of the advantage that short-term rental had over long-term. It works the same way in reverse: the owner of a long-term rental remembers the steady monthly income, while booking the refresh between tenants in their head as a one-off event. It is not one-off. It is a regular cost of the model. The maths breaks fastest with a flat standing empty for a month.

The method of an honest comparison is trivial to describe and annoying to carry out. You count both options at the same level: revenue minus all operating costs, minus periods without a tenant, over a full year. Not in the best month, not in the season, not in a scenario where everything went to plan. A year covers the season and the dead months, inspections and breakdowns, a tenant change and empty weeks. Any shorter period always favours whichever model happened to be on a good run. The rest of this article breaks the method down into pieces: where revenue comes from, which costs belong to only one model, how to price vacancies and your own work, and how to run the numbers for a specific flat.

How revenue is built in each model

Long-term rental rests on one contract and a fixed rent. You can predict the annual revenue quite accurately as early as January, because the variability comes down to two events: a possible tenant change and a rent increase. That predictability has real value, especially when the flat carries a mortgage with a fixed instalment. You plan a household budget completely differently than with income that in February amounts to a third of what it is in July.

Short-term rental plays a different game. Revenue is the nightly rate times the number of nights sold, and both variables live their own lives. The rate goes up in peak season and around local events, and drops in the dead months. Occupancy depends on the day of the week, the length of stay and how many competitors listed a similar flat a few streets away at the same time. Lay those two curves on top of each other and you get revenue that over a year can be higher than rent, but spread out very unevenly.

The most common mistake in such calculations? Multiplying the nightly rate by thirty. That sum assumes full occupancy for the whole month, which nobody achieves even at the peak of the season, and outside the season the result misses reality many times over. The number that comes out of it does not describe any real flat.

And then there is location, which responds to something different in each model. Short-term rental lives off tourist and business traffic: the old town, the railway station, a conference centre, the airport. Long-term rental draws on the job market and universities, so a district with office buildings or a campus gives steady demand regardless of the weather and the events calendar. The same flat can be excellent in one model and average in the other.

• Season - the gap between the peak and the dead months can be wider than the difference between districts.
• Competition within a few streets - what counts is not the number of listings in the city, but what a guest filtering results for a chosen area actually sees.
• Quality of photos and description - the guest’s first decision filter, it affects click-through on your listing before anyone even looks at the price.
• Flexible minimum stay - a rigid minimum cuts out short weekends, which in many locations are the core of demand.
• Reviews from earlier guests - a fresh listing with no history starts from a weaker position and usually has to make up for it on price.

Costs that appear on only one side

Some expenses belong exclusively to short-term rental and show up at the frequency of bookings, not months. Cleaning after every stay, laundry and swapping bedding sets, restocking cleaning products and consumables, platform commissions, handling check-ins and key handovers. On top of that comes faster wear: furniture, appliances and bathroom fittings take on dozens of users a year instead of one household, so replacement comes sooner than the manufacturer’s manual suggests.

Long-term rental has its own set of costs, only concentrated in a single moment. A tenant change means refreshing the flat, a listing, sometimes an agent’s commission, and usually a few weeks without income between contracts. Add the risk of arrears and possible debt collection, which is practically absent in a model built on prepaid bookings. Minor repairs are reported by the tenant, and it is the tenant who decides what counts as a fault requiring the owner’s involvement.

A separate category is shared costs, left out of comparisons precisely because they sit on both sides. The building or housing cooperative fee, property tax, insurance, installation inspections, utilities during periods without a tenant. They do not change the outcome of the comparison, but they change its scale: leave them out and both models look more profitable than they are, and a flat with a high administrative fee pretends to be an investment it is not.

Utilities are settled completely differently in the two models. With nightly rental, electricity, water, heating and internet fall on the owner, because the guest pays an all-inclusive price. With long-term rental most of those items pass to the tenant and disappear from the owner’s account, except during vacant periods. That single difference is often one of the bigger items in the whole calculation, especially in flats with electric heating or in buildings that heat the street.

Tip: before you compare models, list the annual costs for each flat separately and assign them to that specific property. A cost thrown into the shared pot of the household budget disappears from the calculation and inflates the result.

Vacancy and turnover: two different kinds of risk

Empty days occur in both models, they just mean different things. With long-term rental, vacancy is rare and that is exactly why it hurts: the gap between contracts usually lasts a few weeks, during which all fixed costs keep running and revenue is zero. One such episode can wipe out the advantage that steady rent had been building over the previous months. Over a few years the risk is therefore occasional, but concentrated.

In short-term rental, free days are part of the model, not a failure. Nobody sells every night of the year and nobody plans to. What counts is the average annual occupancy, not the fact that a Tuesday in November stayed empty. An owner who cuts the price at every free night usually damages their result more than if they had simply accepted the gap in the calendar.

Turnover costs time more than money. Preparing the flat, communication before and after arrival, handing over keys, settling the deposit, checking the state of the flat. Each of these tasks is short and none can be skipped entirely. With one flat this work dissolves into the week and can go unnoticed. What we see among tenanto users is that with three or four properties it becomes the main variable deciding the choice of model, often more important than the difference in revenue itself. An owner with a full-time job and two flats rented by the night will sooner or later run into the question of whether they can afford another one.

Seasonality works like a hidden cost. Off-season months generate full fixed costs with minimal revenue and have to be covered by the surplus earned at the peak. Anyone who counts them separately falls into an illusion: July looks outstanding, February looks like an accident at work, and the real result lies in the sum of twelve months.

The owner’s work has a price

Short-term rental is an operational business run every day. The calendar needs watching all the time, prices react to the season and to events, guests write at all hours and expect a quick reply, the cleaning crew needs a schedule matched to check-out times. And a washing machine that dies in the middle of a stay will not wait until Saturday. It will end in a complaint and a review that lowers occupancy for months to come.

Long-term rental has a cyclical rhythm. Settling rent and utilities, contact over repairs, correspondence when renewing or ending the contract, settling the deposit. There are fewer tasks and most can be planned ahead, so the rental runs comfortably alongside a full-time job.

Pricing your own work decides the outcome of the comparison. Estimate the number of hours per month needed to handle each option and assign them the rate you would pay someone else for the same job. Without that step short-term rental always wins on paper - because the most expensive resource in the whole calculation enters it as free.

The alternative: outside management. An operator takes over guest handling, cleaning and the calendar, the owner’s workload drops almost to zero, but part of the margin stays on the operator’s side. You put that into the costs rather than treat it as a way of avoiding them. Comparing self-managed short-term rental with long-term rental, without accounting for the difference in time, is simply incomplete.

• Payment records - who paid, how much, for which period and what is missing.
• Keeping track of deadlines - contract end, rent increase, meter readings, recurring payments.
• Documentation of the flat’s condition - photos and handover protocols when the flat is given over and returned.
• Archive of contracts and invoices - a full set of documents available without digging through your mailbox.
• Data for the tax return - revenue and costs in a form ready to be transferred.

Paperwork and settlements differ more than you would think

The paperwork in the two models looks different from day one. Long-term rental means a contract for a longer period, a handover protocol, a deposit and its settlement, and in the case of occasional rental (najem okazjonalny) the additional filings and declarations required by law. Plenty of formalities, but they cluster at the beginning and the end of the relationship with the tenant, with many quiet months in between.

Short-term rental spreads the obligations evenly and multiplies them by the number of bookings. House rules, confirmations, settlements with platforms, registration matters, information duties towards the building community. In some cities local regulations have been added that restrict this type of rental in residential buildings, so checking the legal situation before investing in furnishings is now a duty, not overzealousness.

The scale of record-keeping changes too. Instead of twelve transfers a year you have dozens of settlements with different amounts, dates and sources, plus invoices for cleaning and laundry, plus deducted commissions. That you can no longer keep in your head or in your bank account history.

A spreadsheet is enough to start with and stops being enough faster than most owners assume. With two flats settled under two different models the columns stop matching, some costs land where they should not, and the change history is lost with the first larger correction. A year later you will not reconstruct where a particular number came from.

Tenanto was created for exactly this spot: one record of contracts, payments, costs and deadlines, whatever rental model you choose. For a single flat the plan is free with no time limit, so you can compare both options on your own data from a full year before you decide to change anything.

How to run the numbers for your own flat, step by step

The calculation for a specific property takes six steps, done in the same order for both options.

1. Work out the real annual revenue. For long-term rental: rent times twelve minus the expected gap between contracts. For short-term: the rate times realistic occupancy, calculated separately for the season and for the months outside it.
2. Subtract the operating costs tied to the model. Cleaning, laundry, commissions and consumables on one side, refreshing the flat and the costs of a tenant change on the other.
3. Subtract the shared costs. The administrative fee, property tax, insurance, inspections, utilities during periods without a tenant.
4. Subtract tax according to the form of taxation you actually use.
5. Subtract the value of your own work at the rate you would pay someone else for the same tasks.
6. Compare the net result over a full year, never in the best month.

Tip: run a pessimistic version as well - occupancy lower by a dozen or so percentage points and one longer vacancy during the year. A model that wins only under optimistic assumptions does not really win.

Tip: if you have no historical data on costs, start with solid record-keeping for one full year. You will then make the decision about changing model on numbers, not on the impression left by the last good season.

Sometimes the whole comparison loses its point before you even begin. If local regulations or the building community’s rules rule out short-term rental in that building, the discussion is over regardless of the arithmetic. The same goes for a mismatched property: a flat on the outskirts, at a standard acceptable to a tenant on a one-year contract, rarely attracts guests looking for a weekend stay. Before you count the revenue, check whether anyone wants to buy this product at all.

Summary and the most common question

Putting the two models side by side produces a repeatable pattern, though you will not draw a universal recommendation from it. Short-term rental usually gives higher gross revenue, but drags along clearly higher operating costs and an incomparably greater workload. Long-term rental brings less, but predictably, with low involvement and less sensitivity to the season and to regulatory changes.

Which option wins depends on four things: location, the standard of the flat, the time the owner has available, and local regulations. A market average says nothing about a specific flat, because it mixes properties in tourist centres with those on residential estates. What counts is the calculation for your property, on your costs, with your valuation of time. You choose a model based on the net result over a full year and your tolerance for operational work, not on the rate in the listing. Both models end the year the same way, with the annual rental settlement to prepare.

Is short-term rental always more profitable than long-term?

No. The advantage in gross revenue can be eaten entirely by cleaning, platform commissions, utilities on the owner’s side, faster wear of furnishings and empty weeks outside the season. What settles it is comparing the net result over a full year for a specific property, done by the same method for both options, with the owner’s time priced in as a full cost item. There is also a precondition: checking whether nightly rental is allowed at all in that building and that city. Without it, even the prettiest-looking calculation stays theoretical.