Real estate investment: should you rent for the year or for the holidays?
13 December 2021
The income generated by certain seasonal rental properties legitimately arouses the interest of many landlords or individuals wishing to embark on rental investment. In which cases is this formula more profitable than year-round rental? The Côte Vermeille agency explains everything to you!
Seasonal or year-round rental: what to choose?Seasonal rental consists of renting your property to individuals - most often vacationers - for a short period not exceeding 90 days. Typically, the home changes occupants every two to three weeks. Long-term rental, on the other hand, is often a “bare” rental (unfurnished) and will serve as the main residence of its occupant, with the signing of a renewable lease for a period of three years. Seasonal rental rates are significantly higher than bare rental. However, it is essential not to be blinded by this differential and to take into account several criteria to make the right choice.
Did you know ? For the same good, a weeklong vacation rental booking can approach or even exceed one month's bare rental rent, at least during peak season.
The geographical location of the property: an essential criterionSeasonal rental generates significant income in high season, while bare rental provides regular income throughout the year. As always in real estate, it is the geographical location of the property that will play a major role in determining the most profitable form of rental. The year-round rental (bare or furnished) is in principle preferred for a large metropolis, a city with a lot of students or more generally an employment area distinguished by its dynamism and growth. In short, the sector must constitute a pole of attraction for its inhabitants, without shining, in particular thanks to its tourist assets. Seasonal rentals can be very interesting in areas with high tourist potential, and in particular in seaside resorts and mountain resorts. A particularly attractive property can be rented there not only in high season, but also for a large part of the year at a lower rate, resulting in a faster return on the investment.
A tip to know The percentage of second homes in a municipality is an excellent indicator of its level of tourist attractiveness. You can find this information on many websites specializing in monitoring property prices.