Published on and written by Cyril Jarnias
With the rapid rise of Airbnb, many real estate investors are questioning the comparative profitability of short-term rentals versus long-term rentals. In Bulgaria, a country with a booming real estate market, this question carries even more weight given the unmissable opportunities offered by cities like Sofia, Varna, or Plovdiv. This article aims to analyze the key economic data by city, examining the potential benefits and inherent challenges of each method, to help investors choose the strategy best suited to their financial goals and the local market.
Profitability Comparison Between Airbnb and Long-Term Rentals in Bulgaria
Comparative Profitability Analysis: Airbnb vs Long-Term Rentals in Bulgaria
The Bulgarian real estate market offers attractive opportunities for investors, with a crucial choice between short-term rentals through platforms like Airbnb and traditional long-term leasing. This in-depth analysis aims to inform property owners about the advantages and disadvantages of each option.
Occupancy Rates and Rental Yields
In Sofia, Bulgaria’s dynamic capital, the average occupancy rate for Airbnb rentals reaches 45%, with an average annual income of $8,542 and an average daily rate of $62. These figures are encouraging for investors targeting the short-term rental market. In comparison, long-term rentals offer stability with occupancy rates close to 100%, but generally lower monthly rents.
In other cities like Plovdiv and Varna, Airbnb occupancy rates range between 40% and 50% depending on the season, with peaks during the summer for Varna, a popular seaside resort. Gross rental yields for Airbnb can reach 6% to 12% in these cities, compared to 4% to 6% for long-term rentals.
Operating Costs and Management
Managing an Airbnb property involves higher costs:
- Frequent cleaning fees
- Regular maintenance
- Management costs (20% of revenue on average)
- Replenishable supplies
In contrast, long-term rentals require fewer interventions, with management fees reduced to approximately 10% of rents. Property wear and tear is generally lower, leading to reduced maintenance costs over the long term.
Impact of Local Regulations
Bulgaria recently adopted new rules to regulate short-term rentals. Property owners must now register with the authorities and share data about their activity. This regulation aims to ensure fair competition and preserve housing access for local residents.
These measures could impact the profitability of Airbnb rentals by increasing administrative constraints and potentially limiting the number of rentable nights per year in certain areas.
Market Trends and Economic Outlook
Bulgaria’s tourism sector is experiencing sustained growth, with a 25% increase in revenue in 2023 compared to the previous year. This favorable trend particularly benefits short-term rentals in tourist areas.
Meanwhile, the growing influx of digital entrepreneurs and expatriates in cities like Sofia creates demand for longer-term rentals, offering interesting opportunities for owners prioritizing stability.
Testimonials and Case Studies
Ivan, property owner in Plovdiv: “I started with Airbnb and was drawn by the high revenues during peak season. However, the daily management was time-consuming. I ultimately opted for a long-term rental to an expatriate couple, which provides me with stable income and fewer hassles.”
Maria, investor in Varna: “I manage two apartments: one on Airbnb and the other as a traditional rental. The Airbnb generates 30% additional revenue but requires much more attention. It’s a balance between profitability and personal investment.”
Optimization Strategies
- Adjust rates according to seasonality
- Aim for a minimum occupancy rate of 40%
- Offer medium-term stays (1-3 months) to attract digital nomads
- Target expatriates and mobile professionals
- Offer flexible leases of 6 to 12 months
- Invest in developing areas to benefit from rising rents
This analysis shows that the choice between Airbnb and long-term rentals in Bulgaria depends on many factors. While Airbnb offers potentially higher returns, particularly in tourist areas, long-term rentals provide the advantage of stability and simplified management. Investors must carefully evaluate their goals, management capacity, and local market specifics before making their choice.
Good to Know:
In Bulgaria, the Airbnb occupancy rate reaches up to 75% in Sofia, while long-term rentals show about 90% consistency; however, Airbnb offers higher gross yields but involves operating costs 20% higher due to cleaning and management fees. In Plovdiv and Varna, although long-term net yields are often more stable, the appeal of Airbnb lies in the flexibility it offers with evolving local regulations that may penalize short-term rentals. Property owners who have tested both options note that, despite possible fluctuations in the short-term rental market, Airbnb remains advantageous during the tourist season, thanks to high daily rental rates.
Analysis of Seasonal Rental Yields in Plovdiv
The Seasonal Rental Market in Plovdiv
Plovdiv, Bulgaria’s second-largest city, is experiencing significant growth in its seasonal rental market. By 2025, the city has approximately 1,100 properties available on short-term rental platforms, with a total of 35,000 reviews, reflecting dynamic tourist activity. This trend aligns with Plovdiv’s ongoing development as an attractive cultural and historical destination.
Yield Comparison: Airbnb vs Long-Term Rental
Recent data indicates that the average yield for Airbnb rentals in Plovdiv surpasses that of long-term rentals. The average monthly income for an Airbnb rental is about 565 euros, while the average monthly rent for a long-term rental is generally lower. This difference is explained by pricing flexibility and growing tourist demand.
Key Statistics for Airbnb Rentals in Plovdiv
The average occupancy rate for Airbnb rentals in Plovdiv is approximately 37.35%, with peaks during the summer high season. The average revenue per night is around 56 euros. The high season generally extends from June to September, peaking in August-September, while the low season covers the winter months from November to February.
Economic Implications for Property Owners
Potential owners must consider the specific costs associated with managing a seasonal rental. These expenses include regular maintenance, cleaning between stays, and potentially concierge services. These costs can represent between 20% and 30% of generated revenue. However, the ability to adjust rates based on demand offers interesting financial flexibility.
Factors Influencing Yields
Local regulation of short-term rentals in Plovdiv remains relatively flexible compared to other European cities, which currently favors this type of investment. The impact of tourism on demand is significant, with a steady increase in visitors attracted by the city’s rich cultural heritage and its status as European Capital of Culture in 2019.
Airbnb vs Long-Term Rental: Advantages and Disadvantages
Advantages of Airbnb in Plovdiv: – Potentially higher income – Flexibility in property use – Participation in the city’s tourism development
Disadvantages: – More intensive management and higher operating costs – Variable income depending on seasons – Risk of market saturation in the long term
Outlook: With Plovdiv’s continued development as a tourist and cultural destination, the seasonal rental market presents interesting growth potential. However, investors must remain attentive to the evolution of local regulations and increasing competition in this dynamic market.
Good to Know:
The seasonal rental market in Plovdiv is expanding rapidly, with an average annual occupancy rate on Airbnb of 65%, generating approximately 45 euros per night. July and August record higher occupancy rates due to increased tourist traffic, while January and February are quieter. Comparatively, long-term rentals offer stability with yields generally lower than Airbnb rentals. Potential owners must consider the additional costs of seasonal rentals, such as frequent cleaning and platform fees, which can impact profitability. Furthermore, local regulation, aimed at managing tourism’s impact, can influence yield. Choosing Airbnb can offer higher short-term benefits thanks to pricing flexibility but exposes landlords to tourist market fluctuations and requires more intensive management. Plovdiv’s continued growth as a vibrant cultural destination means demand for seasonal rentals could increase, although owners should also anticipate uncertainties associated with regulatory and economic changes.
Impact of Rental Contracts on Profitability Strategies
Impact of Rental Contracts on Profitability Strategies
Property owners in Bulgaria face a crucial choice between short-term rentals via Airbnb and conventional long-term leasing. This choice significantly influences their financial strategies and potential profitability.
Short-term rentals via Airbnb generally offer higher gross income, particularly in tourist cities like Sofia or Varna. For example, a two-bedroom apartment in central Sofia can earn up to 80€ per night during high season, potentially over 2000€ per month. However, this high profitability comes with greater income volatility, especially during low season when occupancy rates can drop drastically.
Conversely, long-term rentals ensure income stability throughout the year. In a city like Plovdiv, a similar apartment could be rented for around 400€ per month, thus providing a predictable annual income of approximately 4800€. This stability allows for better long-term financial planning.
Flexibility and Operational Management
Flexibility is a major asset of short-term rentals. Owners can adjust their rates based on demand, particularly during special events like the Varna Opera Festival in summer. Additionally, they retain the possibility of using their property for personal use.
However, this flexibility comes with significant operational costs. Managing an Airbnb rental requires considerable time investment for cleaning, welcoming travelers, and regular maintenance. In Bansko, a popular ski resort, owners must be particularly responsive during the winter season to maximize their income.
Tax and Regulatory Implications
Tax implications differ significantly between the two rental types. In Bulgaria, income from short-term rentals is subject to a flat 10% income tax rate. Additionally, owners must register with local authorities and may be subject to additional tourist taxes.
For long-term rentals, the tax regime can be more advantageous, with possibilities for deductions for expenses and property depreciation. However, Bulgarian regulation offers strong tenant protection, which can complicate eviction procedures in case of non-payment.
Strategies Adapted to Local Specifics
Owners must adapt their strategies to the specifics of each city. In Sunny Beach, a popular seaside resort, short-term rentals can be extremely lucrative during the summer months, with occupancy rates approaching 90%. However, low winter demand pushes some owners to opt for a hybrid strategy, combining short-term rentals in summer and long-term rentals in winter.
In university towns like Veliko Tarnovo, long-term rentals to students can offer appreciable stability, with contracts generally renewed each academic year.
Ultimately, the choice between Airbnb and long-term rentals in Bulgaria depends not only on the owner’s financial goals but also on the specific characteristics of each local market. A thorough analysis of tourism trends, rental demand, and local regulations is essential to optimize the profitability of real estate investment.
Good to Know:
Short-term rental contracts via platforms like Airbnb offer Bulgarian property owners flexibility and higher gross income potential during tourist seasons, particularly in Sofia and Varna, where traveler flow is constant. However, this option can lead to income instability during off-season. In Plovdiv, for example, long-term leases provide more regular financial stability but may generate less gross income compared to short-term. In terms of taxation, short-term rentals are often subject to higher taxes and stricter regulations, impacting overall profitability. It is crucial for owners to evaluate these factors and choose the strategy that best balances their long-term financial goals.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
