Seasonal Rental Opportunities in Germany

Published on January 25, 2026 and written by Cyril Jarnias

The German short-term rental market is undergoing significant transformation. Between the explosion of platforms, tightening regulations in major cities, and the rise of new destinations, the country now offers a rich yet demanding playing field for both investors and occasional hosts. Far from being a simple Airbnb gold rush, short-term rentals exist within a context of chronic housing shortages, increasingly strict rent controls, and sophisticated taxation. However, for those willing to educate themselves and target the right segments, opportunities remain plentiful.

A Dynamic but Highly Seasonal National Market

Nationwide, data shows that the short-term rental sector has become markedly more professional. Between August 2023 and August 2024, the Average Daily Rate (ADR) for short-term rentals fluctuated between €96 and €105, peaking in October (€105) and hitting lows in February and March (€96). The RevPAR (Revenue per Available Rental) reached a minimum of €36 in January 2024 and a maximum of €61 in July 2024. This gives an indication of the market’s average potential, while keeping in mind considerable disparities between cities and regions.

This seasonality is clear: rising prices and occupancy rates in spring and summer, a downturn in fall and winter, with a notable exception around Christmas markets and major urban festivals. For an investor, this means planning a year-round model: good months must offset the low seasons, and pricing strategy must be responsive.

One observation stands out, however: the volume of listings is climbing, the market is filling up, but demand is keeping pace, supported by a strong economy, an efficient transportation network, and a strong culture of domestic travel among Germans. Tourist traffic data confirms the growth of this segment, particularly linked to remote work and longer “workation”-type stays.

Berlin: A Highly Profitable but Ultra-Regulated Giant

Berlin remains the beacon of the German short-term rental market. The capital combines a massive influx of tourists and business travelers, a global cultural scene, and a structural housing deficit.

Between June 2024 and May 2025, a typical short-term rental in Berlin is booked for 281 nights per year, with a median occupancy rate of 77%. The ADR is around €117, for an average annual revenue of €30,688. The typical monthly revenue thus exceeds €2,500, with a market described as “strong but not saturated.” There are over 7,200 active listings, and even nearly 15,000 if the entire inventory mentioned in some reports is included.

To better visualize the performance of the city’s key neighborhoods, we can compare some key districts.

Berlin: Comparison of Profitable Neighborhoods

Mitte dominates in gross annual revenue thanks to a high ADR (€146) and consistent demand. Friedrichshain-Kreuzberg and Pankow compensate for a slightly lower ADR with even higher occupancy rates (80–81%). These figures illustrate the typical trade-off in short-term rentals: aiming for a high nightly rate in the city center or favoring dynamic, slightly peripheral areas with high occupancy.

Behind these impressive results, however, lies a much harsher legal reality: Berlin applies both rent control (Mietpreisbremse, applicable to traditional rentals) and very strict legislation on “Zweckentfremdung” – the prohibition of converting residential housing into tourist accommodation without authorization. Since 2018, every host must register their property with the Bezirksamt, obtain a registration number, and in many cases, a specific permit for short-term rentals. Fines can theoretically reach €500,000.

Augsburg: A Solid Secondary Market, More Accessible

In contrast to the Berlin behemoth, Augsburg illustrates the appeal of well-connected medium-sized cities, with steady tourist and professional demand but without speculative overheating.

Between September 2024 and August 2025, a typical short-term rental in Augsburg is booked for 248 nights per year, with a median occupancy rate of 68%. The average ADR reaches €82, and the average annual revenue is €19,156, or about €1,595 per month. Most importantly, annual revenue growth is positive, at +11.42% year-over-year.

The market has only 134 active listings: it is described as “strong but not saturated.” Municipal rules regarding Airbnb are considered rather flexible, contrasting with Berlin or Munich.

Data by “revenue tier” helps to get a sense of the market:

In other words, a well-positioned property – in the high tier – can significantly exceed €2,500 in monthly revenue, with a still relatively moderate ADR, allowing it to remain competitive.

Inner Central West benefits from both a good occupancy rate and a high ADR, making it the prime target for seasonal investment. Inner Central East shows that a lower pricing strategy can remain very profitable thanks to occupancy.

Augsburg is a good example of the type of German “B-market” sought by many investors: solid demand, absence of overheating, more lenient regulations, a significant share of international clientele (about 42%) but a dominant domestic base, and a growing presence of professional managers.

Springe and Farchant: The Potential of Small Tourist Towns

Beyond major metropolises and medium-sized cities, the German short-term rental market harbors many small municipalities where tourist or recreational demand creates highly profitable niches. Springe in Lower Saxony and Farchant in Bavaria offer two instructive examples.

Springe: A Contrasting Micro-Market with Light Regulation

In Springe, there are 43 active short-term rental listings. The regulatory framework is described as not very restrictive, facilitating market entry.

Demand shows a very seasonal structure, with:

– a revenue peak in September,

– the weakest month in January,

– a spike in occupancy demand in February,

– an occupancy low in June.

Throughout the year, three major phases are discernible:

A particularity of Springe: occupancy rates can remain relatively decent even in the low season, but at a lower ADR and with overall reduced revenue. During the absolute peak month, a host in Springe can achieve $1,700 in revenue, a 48.8% occupancy rate, and an ADR of $135. Conversely, the worst month can drop to $703 in revenue, 15.1% occupancy, and an ADR of around $118.

This shows the difference between an optimized host and another: the gap ranges from $339 to nearly $2,000 per month. Thus, Springe does not offer automatic returns, but rather an opportunity for seasoned operators capable of placing themselves in the top 25% through a good product, effective marketing, and dynamic pricing.

The profile of the listings also explains this dispersion: about 67.4% are entire homes/apartments, 32.6% are private rooms. More than half (53.5%) are apartments/condos, 41.9% are houses. The dominant capacities are 1-bedroom units for an average of 2 people, with a minimum stay of 2 nights in nearly 40% of cases. Travelers are mostly domestic (79%), often from Berlin, young (50% born after 2000), and connected (Wi-Fi is considered essential).

Farchant: A Small Alpine Town, Big Ticket Items

Farchant, in Bavaria, shows a completely different revenue scale, even with only 48 active listings. Here too, local regulation is described as weak, but demand and prices are supported by the appeal of the Bavarian Alps.

The ranking of monthly performance is as follows:

For a market of this size, seeing a top 10% above $4,600 monthly is notable. The high season (May, June, February, combining summer and winter sports) shows:

– average monthly revenue: $3,142,

– average occupancy rate: 50.2%,

– average ADR: $237.

The shoulder period remains high (monthly revenue of $2,318, 48.7% occupancy, ADR of $235), and the low season (January, November, December) maintains a very high ADR around $250 despite a lower occupancy rate (36.1%).

During the absolute peak month, a host in Farchant can achieve $3,633 in revenue, 53.8% occupancy, and an ADR of $273. Even the worst month remains respectable: $1,497 in revenue, 33.1% occupancy, ADR at $210.

An important particularity for an investor: the minimum length of stay. In Farchant, the most common mode is… 30 nights or more, for about 32% of listings. This is a clear indicator of an orientation toward medium/long-term furnished stays, on the border between short-term rentals and medium-term furnished rentals. The average booking lead time is high (64 days), with bookings made well in advance for June (117 days), enhancing revenue predictability.

Among attractive areas, the Alpspitze sector stands out for its popularity for mountain activities. Here too, a few professional managers (Holidu, for example, with 4 properties and over $130,000 in gross revenue) show that an industrialized approach to short-term rentals can work very well in a small alpine town.

Understanding Taxation: A Central Issue for Every Host

One of the most often underestimated points by new hosts, whether it’s a secondary residence listed on Airbnb or a dedicated property portfolio, remains German taxation. In Germany, rental income is classified under the category of “income from renting and leasing” (Einkünfte aus Vermietung und Verpachtung), defined by §21 of the Income Tax Act (EStG).

This category covers not only traditional rentals but also furnished short-term rentals, subletting via platforms like Airbnb, parking spaces, certain land rights, etc. Charges paid by the tenant (water, heating, electricity, internet, etc.) are included in the income to be declared. On the other hand, security deposits are only taxable if the owner actually uses them to cover a debt or damage.

Income Tax: Brackets and Allowances

Income tax in Germany is progressive, ranging from 0% to 45%, with:

– a basic tax-free allowance (Grundfreibetrag) of €11,784 for a single person, €23,568 for a married couple filing jointly (2024 figures),

– beyond that, a progressive scale starting at 14%, up to 42%, then 45% for very high incomes,

– a solidarity surcharge (Solidaritätszuschlag) of 5.5% applied to the tax due,

– and, where applicable, a church tax of 8–9% for taxpayers affiliated with a recognized church.

Possible Deductions for a Short-Term Rental Property

Deductible expenses are numerous, provided they can be linked to the rented property:

– operating costs: heating, electricity, water, internet, waste disposal, common area maintenance, property taxes (Grundsteuer),

– management fees, concierge services, security, property management fees,

– maintenance and repairs, including gardening, minor works, furniture replacements,

– marketing costs: platform commissions, advertising, flyers,

– depreciation (AfA) on the building and furnishings,

– acquisition costs: notary, land registry registration, sometimes appraisal,

– loan interest financing the purchase, renovation, or construction,

– insurance premiums (liability, comprehensive, natural disasters),

– agency commissions, travel expenses related to property management,

– tax advice fees.

Expenses for the owner’s personal labor are not deductible.

Specifics of Vacation Rentals: Profit Intention

For expenses related to a vacation home to be accepted, the tax authorities require proof of a real intention to make a profit. If this is lacking, the activity can be reclassified as a “hobby” (Liebhaberei): in this case, income is not taxed, but no expenses or losses can be deducted, eliminating any tax benefit.

– the simplest solution is to exclude any private use of the property and entrust it entirely to an agency,

– if private use and rental are combined, it may be necessary in some cases to establish a 30-year profit forecast, showing that the property will generate a surplus,

– if the property is rented less than 75% of the usual rental time for vacation homes in the region, this forecast becomes virtually essential.

The rent itself plays a role: below 50% of the market rent, only proportional expenses are deductible; above 66%, full deduction is allowed; between 50% and 66%, the tax authorities scrutinize the profit intention more closely.

Very Temporary Rentals and Small Incomes

For occasional rentals, especially subletting or occasional listing via Airbnb, a specific exemption limit of €520 of income per year is provided. Below this, nothing is taxed; above it, the entire income becomes taxable.

This nuance in the system shows that in Germany, renting out one’s primary residence a few weeks a year and operating a portfolio of seasonal apartments do not fall under the same vigilance regime, but both must be declared.

VAT and Potential Commercial Activity

Another often overlooked issue: VAT. Long-term residential rentals are generally exempt from VAT. But short-term rentals – typically, vacation rentals for less than six months – are in principle subject to VAT, at the reduced rate of 7%.

Two parameters determine the obligation to collect VAT:

– sales volume: a small business regime exempts from VAT up to €25,000 in annual turnover (current threshold),

– the nature of services offered: if the model begins to resemble a hotel (frequent turnovers, breakfast, daily cleaning), the authorities may reclassify the activity as commercial, with heavy consequences (potential trade tax, obligation for commercial accounting, loss of exemptions on capital gains upon resale, etc.).

For hosts exceeding the thresholds, VAT can however become a lever, as it allows for deducting VAT on investments (renovations, furnishings), provided the tenants themselves are subject to VAT and use the premises for taxable activities.

Legal Framework: Between Housing Protection and Controlled Openness

Beyond taxation, every investor or owner must navigate a legal environment at three levels: federal, regional (Länder), and municipal.

Rent Control and Protection of the Housing Stock

The Mietpreisbremse – literally “rent brake” – allows federal states to limit rents for new leases to 10% above the local reference rent in tight housing markets. It does not apply to furnished short-term rentals for temporary use, but it weighs on the profitability of traditional rentals, partly explaining the appeal of seasonal or medium-term models.

In parallel, the Zweckentfremdungsverbot (prohibition of misuse of residential space) adopted in several major cities (Berlin, Munich, Hamburg, Frankfurt, etc.) prevents the large-scale conversion of housing stock into tourist accommodations. Municipalities can require planning permission for change of use, impose annual rental day limits, tourist taxes, and fines of up to €500,000 for violations (cases of Munich or Berlin).

Zoning and Building Permits

The BauNVO (Land Use Ordinance) defines types of zones (pure residential, mixed, commercial, industrial, etc.) and permitted uses. “Ferienwohnungen” (vacation apartments rented to transient clientele) are considered non-disruptive commercial enterprises. They are in principle permitted in mixed zones and central urban areas, but rarely in pure residential zones, except as exceptions.

To create a vacation apartment or convert a dwelling into structured tourist accommodation, a building permit (Baugenehmigung), or at minimum change of use permission, is often required. Municipalities can add restrictions via their own urban planning, even if the BauNVO would theoretically allow this type of use.

Host Registration and Documentary Obligations

Any rental of accommodation involving a significant stay also engages the law of Meldepflicht (obligation to register residents). The owner must provide the tenant with a Wohnungsgeberbestätigung (landlord confirmation) enabling the new arrival to register with the town hall or Bürgeramt. Without this registration, it is impossible to obtain a tax number, open a bank account, or finalize certain residency procedures.

This obligation also applies to temporary furnished rentals, except for certain forms of purely tourist accommodation where no official domicile is possible. For many expatriates, choosing seasonal housing that allows for Anmeldung is a non-negotiable condition, and becomes a strong commercial argument for hosts.

Between Asset Management and Commercial Activity

Finally, German law draws a clear distinction between simple private asset management and commercial activity. Owning and renting several apartments does not automatically imply commercial status, as long as the activity remains passive. However, multiplying services, managing many properties in a hotel-like mode, or generating significant profits (beyond €24,500 per year for an individual) can lead to liability for trade tax and commercial register obligations.

The challenge for an investor in short-term rentals is therefore to find a balance between profitability and administrative complexity, choosing the structure (individual, company, use of a professional manager) best suited to their strategy.

Investment Opportunities: Where and How to Position Yourself?

In a country where the housing shortage is in the hundreds of thousands of units, and where the rental vacancy rate hovers around 2%, short-term rentals may seem politically “frowned upon.” Nevertheless, the market remains officially recognized, regulated, and taxed, with a real role in welcoming tourists, workers on assignment, students, and new arrivals.

Several promising avenues emerge.

Bet on Secondary Cities Rather Than Saturated City Centers

Berlin, Munich, Hamburg, or Cologne concentrate high demand, but also the strictest regulations and high acquisition prices. Secondary cities – Leipzig, Dresden, Nuremberg, Magdeburg, Braunschweig, or cities like Augsburg – often offer a healthier compromise:

– lower price per square meter,

– less fussy regulation on short-term rentals,

– presence of universities, industries, or stable institutions,

– growing but not yet saturated tourist market.

Data shows that in many of these markets, gross rental yields (all forms combined) can rival or even exceed those of major metropolises, while reducing political and media pressure.

Exploit the Boundary Between Seasonal and Medium-Term Stays

The case of Farchant, with its 30-night minimum stays for a significant portion of the inventory, illustrates this well: there exists in Germany a very promising grey area between classic vacation rentals (a few nights) and unfurnished long-term rentals. This segment of 1 to 12-month furnished stays is fueled by:

– consultants on assignment,

– students on semester abroad,

– families in transition (renovations, separation, disaster recovery),

– expatriates settling in gradually.

Finely Segment Your Clientele and Product

The success of markets like Springe and Farchant shows that simply “putting an apartment on Airbnb” is not enough to succeed. High-performing hosts:

The rise of “micro-apartments,” coliving, and serviced residences confirms this logic of a finely designed product rather than simple standard housing.

Rely on Professional Managers and Technology

In cities like Berlin or in highly sought-after tourist areas, the day-to-day management of a seasonal property can quickly become time-consuming: check-in/out, cleaning, guest communication, multi-platform management, regulatory compliance.

This is where professional operators come in – management companies, concierge services, integrated platforms – capable of achieving 80–90% occupancy rates in certain destinations, with advanced automation (smart locks, channel managers, all-in-one software like Hostaway, etc.).

This professionalization comes at a cost (3–7% of rental revenue in management fees, or more for “turnkey” formulas), but it allows for optimizing gross revenue, reducing vacancy risks, and minimizing tax and regulatory compliance errors.

Conclusion: A Market of Opportunities for Informed Investors

Opportunities in the German short-term rental market are not lacking, but they are gradually shifting towards more sophisticated models and better-targeted markets. The following combination seems particularly promising:

Within this framework, the high occupancy figures observed in Berlin, Augsburg, or Farchant, the seasonally progressing ADR nationwide, and the structural growth in tourist and professional demand suggest, for the coming years, sustainable returns, provided one navigates rigorously between the legal, fiscal, and political constraints that now characterize the German short-term rental market.

Cyril Jarnias

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.

Find me on social media: