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Eurotour: where to rent a property is more profitable?

In 2016, the UN World Tourism Organization (UNWTO) recorded a new record: over the year, 1.235 billion international trips were made – 3.9% more than in 2015. Almost half of them are in Europe – this is the most popular tourist region in the world, where UNWTO estimates that over the year travelers spent about $ 447.3 billion.

The rapid growth of tourism is a signal for action, even for beginners, but enterprising investors. Real estate is one of the simplest investment tools, and thanks to online services, anyone who has access to the Internet can lease objects. Tranio studied the short-term rental markets for the 20 most visited cities in Europe to answer the question: where is the most profitable property to buy?

Demand
One way to evaluate the demand of tourists is to check the page of the desired city on Airbnb. The AirDNA index (the service that processes data published on the portal) shows how often the accommodation is booked in the selected location through Airbnb. The basis of the calculation – the dynamics of growth in the number of ads and occupancy rates of apartments per year.

Where in Europe are most often booked accommodation through Airbnb
The highest demand in the top twenty cities is Porto, Madrid, Lisbon, Athens, Dublin and Zurich. Least of all rent real estate in Frankfurt and Milan. At the end of 2016, Athens is in first place in terms of the growth rate of the number of offers on Airbnb (+112% per year).

Prices
The cost per square meter is an important factor when buying a profitable property, which, along with the rental rate, determines the profitability of the investment. According to Numbeo, among the 20 cities surveyed, real estate in the city center is the cheapest in Athens (1,380 euro / m²), Porto (1,980 euro / m²) and Budapest (2,240 euro / m²). The most expensive cities are Geneva (10 920 Euro / m²), Zurich (11 920 Euro / m²) and London (14 820 Euro / m²).

Where is real estate in Europe cheaper?
According to AirDNA, renting housing in Athens (45 euros per day), Budapest (46 euros) and Porto (63 euros) costs less for tourists. The most expensive cities are Dublin (134 euros), London (141 euros) and Amsterdam (152 euros).

Where to rent a house in Europe for the day is the cheapest?
If we take into account only the difference between the cost per square meter and the rental rate, then Porto and Athens can be called the most profitable locations for investment in real estate for daily rent to tourists.

Restrictions
In some countries, local authorities are trying to limit the market for short-term leases. In this sense, Barcelona loses to other leaders from the list: the city has stopped issuing rental licenses, many of those already issued will not be renewed. The city council fined Airbnb 600 thousand euros for publishing ads for apartments without a tourist license, and the owners of such objects would have to pay a fine of 60 thousand euros.

In Portugal and Greece, the situation is simpler: in order to rent real estate in Porto and Lisbon, owners must register the object and get a special number – the rules prohibit online platforms from posting ads without it. In Athens, the owner can freely rent one or two apartments for short-term rent for 90 days a year, if his income does not exceed 12 thousand euros.

Athens is one of the last markets in Europe where real estate prices remained low after the 2008 crisis. At the same time, the city turns into one of the main tourist hubs of Europe: in 5 years the number of tourists in Athens has almost doubled. Under these conditions, investors have the opportunity to cheaply buy an apartment in the center of Athens (for 2-3 thousand euro / m²) and rent it out in a short-term lease with a high yield (about 7%). If the Greek economy starts to recover, you can count on a significant increase in prices, since they are still almost two times lower than they were before the crisis.

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