When renting out a property, one of the most important decisions is choosing between temporary rental and long-term rental. Both options can be profitable, but they respond to very different goals and profiles.
While traditional rental offers stability and requires less management, temporary rental can generate higher short-term income, although with more effort and variability.
In this guide, we compare both options in detail to help you decide which one suits you best depending on your profile, your property and your objectives.
However, in the current real estate market, this type of rental coexists with the traditional long-term model. Both have advantages and disadvantages depending on the owner’s needs, the type of property and the tenant profile.
Key differences between temporary and long-term rental
The main difference between the two models lies in three factors: contract duration, income stability and the level of management required.
- Long-term rental seeks stability
- Temporary rental seeks to maximise returns
- Regulation and taxation also differ significantly
Permanent or main residence rental: long-term contract and stability
Long-term rental is the most common option for those seeking stable income and less management involvement. Regulated by the Urban Leases Act (LAU), it refers to long-term contracts, generally for a period of one to five years, and is the ideal type of rental for those seeking stability and security of income. Contracts are automatically extended after the initial term unless one of the parties decides not to renew.
Advantages:
- Stable income. A long-term contract ensures a constant monthly rent, reducing the possibility of the property remaining vacant for extended periods. For this reason, one of the main advantages of this model is the stability it offers the landlord. However, this also means that annual rent increases are limited, as stipulated by law. One of the most significant changes in the amendments to the Housing Law is that the CPI is no longer the main benchmark for calculating rent increases, giving way to the introduction of the new Housing Rent Update Reference Index (IRAV).
- Less management. Tenant turnover is reduced and, therefore, so are the search and assessment processes. Maintenance tasks are also minimised.
- Less wear and tear on the property. With fixed tenants, the property usually suffers less deterioration than in temporary rental.
Disadvantages:
- Less flexibility. Once the contract has been signed, the owner cannot easily make use of the property.
- Legal regulations. Permanent contracts may involve more regulations and rights in favour of the tenant.
Temporary rental: flexibility and short-term profitability
Temporary rental is aimed at maximising income over short periods, at the cost of greater management and variability, and is a popular option among tourists, students or people who need to travel for work.
Advantages:
- Higher profitability. In tourist areas or high-demand locations, short-term rental can generate more income than traditional rental.
- Flexibility. The owner can make use of the property during certain periods or adjust prices according to the season. This type of rental is therefore more flexible, allowing contracts ranging from 32 days to 11 months. Below 32 days, it is considered holiday rental.
- Lower risk of non-payment. As payment is collected in advance, the risk of default is minimised.
Disadvantages:
- Higher tenant turnover, which involves more management tasks, such as frequent cleaning and maintenance. On the other hand, every time a contract ends, the owner must find new tenants, which can lead to empty periods between contracts.
- Irregular income. Demand can fluctuate depending on the season, affecting the owner’s financial stability.
The temporary rental contract is also regulated by the Urban Leases Act (LAU). In particular, article 3 of this law classifies it within the category of “lease for use other than as a dwelling”. This means that it is not governed by the same rules as main residence rentals, but by specific conditions intended for rentals with a different purpose, such as temporary stays. In this case, the owner has more freedom to negotiate the terms of the contract, such as the rent price, deadlines and conditions, but always within the frameworks established by the market.
Direct comparison: profitability, risk and management
| Factor | Long-term rental | Temporary rental |
|---|---|---|
| Profitability | Medium | High (potential) |
| Income stability | High | Low/Medium |
| Management | Low | High |
| Risk of non-payment | Medium | Low |
| Vacancy | Low | High |
| Regulation | High | Changing |
Tax comparison
Taxation is one of the most important factors when choosing.
- In main residence rental, there are significant tax reductions on net income.
- In temporary rental, these advantages are smaller or non-existent, which can reduce real profitability.
In the case of main residence rental, income must be declared as net income in the personal income tax return. Owners of permanent rental properties may deduct up to 90% of their income in personal income tax, which represents significant tax relief. In the case of temporary rental, although net income must also be declared, tax deductions are more limited.
In main residence rental, there are significant tax reductions on net income.
According to data from Idealista, seasonal rental continues to gain weight within the Spanish market. In the second quarter of 2026, this type of rental already represented 29% of total rental supply, after increasing by 13% year-on-year. Meanwhile, the supply of permanent rental fell slightly, by 0.2% compared with the same period of the previous year. This trend therefore shows the growing weight of temporary rental compared with the long-term model, although with significant differences between cities.
Beyond what the comparison shows, the choice between temporary rental and main residence rental will depend on the owner’s needs and the type of property. For those seeking stability and steady income, main residence rental will be the safest option. In addition, the tax advantages and the protection offered by the Urban Leases Act are attractive to both owners and tenants.
On the other hand, for those who prefer greater flexibility and the possibility of generating higher short-term income, temporary rental may be the right option. However, it should not be forgotten that this model involves greater risk and more intensive management.
Which option is better depending on your profile?
The choice does not depend only on profitability, but also on the type of investor:
Choose long-term rental if:
- You are looking for stable income
- You do not want to manage actively
- You prioritise legal certainty
Choose temporary rental if:
- You are looking to maximise income
- You are willing to manage more
- Your property is in a high-demand area
How to choose between temporary or traditional rental
Before deciding, analyse these factors:
- Property location
- Demand profile
- Time available for management
- Level of risk you can take
- Applicable taxation
There is no single best option between temporary and long-term rental. The decision depends on your objectives as an owner.
If you are looking for stability and less involvement, traditional rental is the more predictable option. If, on the other hand, you want to maximise income and can take on more active management, temporary rental may offer higher profitability.
In any case, the key is to align the strategy with your profile and the characteristics of the property.
Frequently asked questions
Which is more profitable, temporary or long-term rental?
Temporary rental can be more profitable, but it is also more variable and demanding in terms of management.
Which type of rental has less risk?
Long-term rental is usually more stable and predictable.
Can you switch from one model to another?
Yes, although it depends on local regulations and the type of contract in force.
What taxes are paid in each case?
Both are taxed under personal income tax, but main residence rental has greater deductions.
