Higher rental yields
The main advantage of seasonal rental is its strong capacity to generate profitability.
Indeed, short-term rental has proved to be an excellent way for property owners to optimize the rental yield of their properties, and consequently their income.
The nightly billing model
Per-night pricing is a billing model where the rental price of a property, such as a hotel room, apartment or vacation home, is determined on a daily basis.
As a result, the price set on a daily basis is higher than if a tenant were to rent the property on a long-term basis. Taking the example of a homeowner who rents out his property at €1,000/month, he would only need to rent out 10 nights at €100 to achieve the same turnover.
Dynamic pricing
Unlike a monthly or annual rental, where the price is fixed for the duration of the contract, nightly pricing allows you to adapt and set a rate for each night spent in the accommodation according to various factors, such as the season, demand, local events, and even the days of the week.
For example, a seaside apartment in Cannes will be more expensive in summer, while a home near a Christmas market will be more expensive in winter. According to
Priceonomics
dynamic pricing during periods of high demand can boost revenues by 50%, maximizing gains during peak periods.
One-off events such as the 2024 Olympics in Paris are a boon for owners, who will be able to multiply their rental prices by 2 or 3.
Income comparison: short-term vs. long-term
On average, Airbnb profitability is double that of long-term rental. Seasonal rentals are therefore much more profitable, especially in large cities.
Let’s take the example of a 2-bedroom apartment in Paris. For standard rentals, the property is valued at €2,400/month. Over 12 months, it would have generated €28,800.
This same property, rented at an average of €190/night with an occupancy rate of 75%, brought in €51,300 for its owner in 1 year. That’s almost twice as much sales.
Beware, however, of the 120-day seasonal rental restrictions in major cities. A good way to maximize your profitability is to mix seasonal rental for 4 months of the year with medium-term rental for the other 8 months.
This could bring in €17,100 for seasonal rentals and €27,200 for medium-term rentals, with a rental price of €3,400/month. For a total of €44,300 .
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Flexible rental
Short-term rental gives owners unprecedented flexibility in managing their property.
This freedom can have a significant impact on their personal satisfaction, while maintaining their financial benefits.
Personal use of your home
One of the major attractions of seasonal rentals is the ability to reserve specific periods for owners’ own needs.
Whether it’s a family holiday, a get-together with friends or simply a well-deserved break away from the main residence, owners can block off dates for their own personal use.
Significant contractual flexibility
Unlike long-term rental, which often involves contracts of a year or more, seasonal rental offers a contractual freedom that attracts and encourages many investors to take up seasonal rental. This reduces the risks associated with problem tenants and allows for smoother rotation.
What’s more, for an owner wishing to make alterations or renovate his home, the absence of long-term rental tenants makes these steps much simpler.
In other words, renting on a seasonal basis puts the owner in a favorable position to adapt the booking schedule as he sees fit, and gives him the choice of occupying the property at the most convenient time for him.
Optimal diversification of its real estate portfolio
Diversification of tenant profiles
Seasonal rental is a clever strategy for diversifying a property portfolio. Unlike long-term rental, which generally attracts one type of tenant with an extended commitment, seasonal rental attracts a wider variety of customer profiles for shorter stays. By targeting various market segments, landlords can not only maximize rental periods, but also reduce the risks associated with dependence on a single type of tenant.
Regulatory diversification
Investing in both classic and seasonal rental can be a wise strategy to protect against regulatory risks. Unfavorable regulations affecting any of these sectors could have a significant impact on your investment. By diversifying, you reduce this risk and ensure the stability of your real estate portfolio, regardless of future regulatory fluctuations.
Better value for your property
A property that’s always up to date
Competition in the vacation rental market is fierce. To stay ahead, owners need to regularly update their properties to keep up with the latest trends. This can increase property value by 20 to 25%, according to estimates by the
National Association of Realtors
Whether it’s modern technologies like smart locks and connected thermostats, or interior design, this regular modernization not only attracts more tenants but also increases the overall value of the property.
Regular maintenance to prevent deterioration of your home
Unlike a long-term rental property, which can sometimes be neglected due to lack of attention from tenants, a seasonal rental requires ongoing maintenance, which can help increase its value on the market.
In this way, problems are identified and resolved quickly, preventing more serious damage in the long term, and therefore the deterioration of your property.
An operating lease
Technological advances in recent years, and the emergence of various external players, have made managing a vacation rental simpler and more efficient than ever.
Online platforms
Sites like Airbnb, Booking.com and Abritel have revolutionized the vacation rental sector. These platforms offer global visibility, facilitate booking management, payments and reviews, while also offering a degree of protection to owners in the event of a dispute.
Automated management
From smart locks to connected thermostats, technology today enables almost entirely automated property management. Owners can remotely control many aspects of their property, reducing the need for constant physical presence and optimizing the tenant experience. In fact, according to a TechCrunch report, the use of smart locks and automated management systems can reduce the time spent on property management by around 40%.
The emergence of external service providers
With the support of rental management professionals such as concierge services, it has never been easier to manage a seasonal rental in the best possible way. At ClickYourFlat, for example, we take care of all aspects of accommodation management, from writing the advert and communicating with travelers, right through to maintenance and upkeep.
No risk of non-payment
One of the major challenges of long-term rental is the risk of non-payment. With seasonal rentals, this danger is considerably reduced, if not eliminated. A study by the
FNAIM
shows that the risk of non-payment in seasonal rentals is less than 2%, compared with around 5% for long-term rentals. Renters usually pay the full amount of their stay when booking online.
Proactive conflict management
Thanks to online rental platforms, owners are paid in advance. In the event of a dispute or damage, most of these platforms offer protection, enabling faster and more efficient resolution. This proactive approach considerably reduces the chances of protracted disputes and non-payment. For example, Airbnb offers an insurance cover called “AirCover”, designed to provide extra protection for hosts.
Frequent tenant turnover
With tenants changing regularly, dependence on a single tenant for income is eliminated. If a tenant doesn’t pay or cancels their Airbnb booking at the last minute, the owner always has the option of re-letting to someone else, minimizing losses.
A strongly trending rental market
The rental market is constantly evolving, with more and more travelers looking for new experiences. Seasonal rental offers owners the opportunity to adapt their property to this type of rental, and ride this new wave.
The rise of flexible stays
Last-minute trips, weekend getaways and short breaks have become the norm for many travelers. This trend is mainly fuelled by the rise of online booking platforms, which enable users to quickly and easily find accommodation to suit their needs.
For landlords, this means a higher turnover of seasonal tenants, but also a chance to fill their units even outside peak periods.
The buzz of local events
Whether festivals, concerts, sports competitions or professional conferences, these events attract large numbers of visitors. Clever and astute owners adjust their rates according to these events to maximize their income.
According to an analysis by
SmartAsset
during major events like the 2024 Olympics in Paris, rental rates can quadruple. It’s the ideal opportunity to increase rates while maintaining optimum occupancy.
Conclusion: is seasonal rental right for you?
A high-yield rental method
Seasonal rentals stand out for their high income potential, especially in areas with high tourist demand. This option can be particularly lucrative during peak season, when nightly rates far exceed those of traditional long-term rentals.
The disadvantages of seasonal rental
However, you need to take into account the time and effort required to manage a seasonal rental. From communication with tenants to regular maintenance of the property, this option requires constant involvement, which can prove difficult for owners who don’t have enough time or resources.
How to get the best of both worlds?
It’s important to compare vacation rentals with other rental methods. Each method has its advantages and disadvantages in terms of income, stability, flexibility and management.
Your choice will depend on your financial objectives, your availability to manage the property and your willingness to interact with tenants.
As mentioned above, the rise of concierge services now makes it easy for owners to set up this highly profitable rental mode, while entrusting the entire management to a service provider.
For owners who are sceptical about this type of operation and are reluctant to take the plunge, we hope we’ve inspired you to let go and take the plunge at last!
