Real estate investment: should you rent for the year or for the holidays?

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 criterion

Seasonal 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.

Seasonal or year-round rental: comparative advantages

Before making your choice, make sure you understand the comparative advantages and disadvantages of each rental formula. Taxation Seasonal rentals benefit from a tax treatment generally considered more attractive, since the rents received are considered as industrial and commercial benefits (BIC). Under the “micro-BIC” regime (rental income of less than € 70,000 per year), a 50% reduction automatically applies before income tax. If you rent accommodation classified as "furnished tourist accommodation", the reduction reaches 71%. As part of a bare rental, you will only benefit from a 30% reduction for micro-land if the rents received do not exceed € 15,000 per year. The alternative, however, is to switch to the actual plan to deduct all of your expenses. Rental management Seasonal or year-round rental? In either case, you are free to entrust the management of the property to a specialized real estate agency such as the Côte Vermeille agency or Paradise International Real Estate. A seasonal rental, however, involves a much greater workload and therefore results in the deduction of a heavier commission by the agency, often between 15 and 25% of the income received, against 6 to 9% for a rental at the year. The management of a seasonal rental without an agency is possible, but supposes availability at all times and a significant workload in terms of administrative formalities. Managing a year-round rental on your own is also difficult, but much more realistic. The choice between seasonal rental and year-round rental is not always straightforward. It is important to take into account the geographical environment of the property and its specific assets to determine the most profitable and least restrictive formula for you. We remain at your disposal to talk about it, come and meet us

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