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The Best Places in Europe to Invest in Vacation Rentals [2024] 

The Best Places in Europe to Invest in Vacation Rentals [2024] - Zeevou

Why put all your eggs in one basket? Diversify your investments by exploring the best places to invest in vacation rentals across Europe. Investing in overseas vacation properties can boost your portfolio and maximise returns.

Purchasing an overseas vacation rental can be daunting, but the rewards can be substantial. Not all countries offer the same benefits, so it’s essential to choose wisely based on your specific needs.

As a savvy investor, avoid focusing solely on one area. Diversify your efforts by considering these top European destinations for vacation rental investments in 2024.

Key Factors in Selecting a Vacation Rental Investment Location

Deep dive into tourist demographics and travel patterns. Look for destinations with consistent tourist inflow throughout the year, not just seasonal peaks. Places offering diverse experiences (think beaches, mountains, cultural attractions) tend to attract a wider range of visitors, boosting occupancy rates.

Seasonal Crowds

Opt for a destination that doesn’t get too overcrowded during peak seasons. This balance ensures your property is appealing without becoming overwhelming for guests during busy periods.

Natural Disasters and European Vacation Rentals 

Avoid investing in areas prone to natural disasters like hurricanes and tornadoes. Minimising these risks protects your investment and ensures the safety and comfort of your guests.

Year-Round Appeal

Choose a property that looks great all year round and is easily accessible. Proximity to public transportation, amenities, and attractions is crucial. Investigate the availability of local events and activities, especially during the off-season, to maintain a steady stream of visitors.

Regulatory Landscape and Vacation Rental Investments

Not all sunshine and roses! Understand local regulations for short-term rentals. Some cities have restrictions on rentals, impacting potential income and guest limitations. Be wary of areas with overly complex regulations or those with a growing trend of restrictions.

Rental Market Performance

Numbers talk! Analyze key metrics like occupancy rates and average daily rates (ADR) to gauge potential return on investment (ROI). Tools like AirDNA can provide valuable data on rental income projections. Look for healthy historical occupancy rates (ideally above 60%) and ADRs that justify your investment.

Tax Considerations for European Vacation Rentals

Tax implications for vacation rentals differ significantly across Europe. VAT rates, Tax residency, and potential deductions all play a role. Consulting with a tax advisor familiar with the specific tax regime of your chosen country is highly recommended. For a more in-depth exploration of tax implications, consult with a professional tax advisor specializing in European real estate investment.

Political Risks 

Political instability, policy changes, and economic factors can all impact the success of your vacation rental investment. Research the country’s political climate, its history of stability, and its economic outlook. Look for a country with established regulations for short-term rentals and a supportive stance towards tourism investment.

Pricing Issues and Your European Vacation Rental

Striking the right balance is key. A price that’s too high might lead to vacancies, while a price that’s too low could leave money on the table. Explore the concept of dynamic pricing, which adjusts rates based on real-time demand.  Vacation rental platforms like Airbnb often have built-in dynamic pricing tools.  These can help you maximise your income during peak seasons and attract bookings during slower periods.

Management Considerations  

Be honest about your bandwidth. Decide how much you want to be involved in the management process. If a hands-off approach is preferred, There are also some cheaper marketing options available, which include online booking websites and property management systems (PMSes).

Top Countries for Vacation Rental Investment:

1. Portugal (The Azores)

Portugal (The Azores) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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A volcanic island chain west of mainland Portugal, the Azores boasts stunning natural beauty and a strong focus on sustainable tourism. This attracts adventure travellers and nature enthusiasts, leading to high occupancy rates (around 63%) and strong cap rates (over 23%) for holiday rentals. The Portuguese government also offers tax benefits and residency programmes for foreign investors.

2. Greece (Corfu)

Greece (Corfu) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Corfu is a classic Greek island getaway with a rich cultural heritage, stunning beaches, and vibrant nightlife. It has a long history of tourism, with consistent demand from tourists, leading to high occupancy rates and stable rental yields.

3. Spain (Seville)

Spain (Seville) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Seville, the capital of Andalusia in southern Spain, boasts a captivating blend of Andalusian charm, historical significance, and vibrant culture. It’s a popular year-round destination, with a well-established tourist infrastructure and a growing short-term rental market.

4. France

France - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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France is a perennial favourite with tourists, thanks to its romantic cities, charming villages, and stunning countryside. While specific locations require deeper research, overall France offers a stable economy, a well-developed tourist industry, and a variety of vacation rental investment opportunities.

5. Italy

Italy - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Similar to France, Italy offers a vast array of investment possibilities, from iconic cities like Venice to historical treasures like Rome. The country boasts a strong tourism industry and many areas with consistent rental demand.

6. Germany (Berlin)

Germany (Berlin) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Berlin, the capital of Germany, is a dynamic and sophisticated city with a growing economy and a large young population. This fuels demand for rental properties, making it an attractive option for investors and one of the best places to invest in vacation rentals.

7. Ireland (Dublin)

Ireland (Dublin) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Dublin, the capital of Ireland, is a vibrant city with a strong tech sector and a growing population. This fuels demand for rental properties, particularly apartments. Additionally, Ireland offers a favourable corporate tax rate for some businesses, which can attract foreign investors.

8. Poland (Krakow)

Poland (Krakow) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Kraków, a historic city in southern Poland, is a popular tourist destination known for its medieval architecture and cultural attractions. With a lower cost of entry compared to other European destinations, Kraków offers potential for good rental yields and capital appreciation.

9. Netherlands (Amsterdam)

Netherlands (Amsterdam) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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Amsterdam, the capital of the Netherlands, is a popular tourist destination known for its canals, museums, and liberal culture. The city has a well-established holiday rental market and a high demand for rental housing due to its growing population.

10. Austria (Vienna)

Austria (Vienna) - The best Places in Europe to Invest in Vacation Rentals - Zeevou
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\Vienna, the capital of Austria, is renowned for its imperial palaces, classical music scene, and high quality of life. The city has a stable economy, a well-developed tourist industry, and a strong demand for investing in vacation rental properties.

Multiple-location Property Management System

A useful tool for managing properties worldwide from one login is a multiple location property management system.

A regular PMS system requires separate accounts for each location. This makes it time-consuming to switch between accounts. On the other hand, a multiple-location property management system allows you to group properties by country, city, and area. This makes it easier to manage different units and unit types. A regular PMS system requires separate accounts for each location. This makes it time-consuming to switch between accounts. On the other hand, a multiple-location property management system allows you to group properties by country, city, and area. This makes it easier to manage different units and unit types.

In addition, it enables you to rent out a property both as a separate room or as an entire house. You can also set different currencies for different properties and operate across multiple countries smoothly. Also, your property management system with multiple locations should have calendar syncing. This feature allows you to see all vacancies and occupancies in one calendar.

Further Reading

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