You have bought a property on the Costa del Sol, the keys are in your hand, and you live most of the year in Manchester, Munich or Malmö. The question that follows is almost universal: should you let it long term on a standard residential contract, or run it as a holiday rental for tourists? The two routes pull in opposite directions on almost every metric that matters, from gross yield to how often your phone rings. This guide compares them honestly for an absentee owner in Málaga province, with realistic 2026 figures for towns such as Marbella, Estepona, Fuengirola, Mijas, Benalmádena, Torremolinos and Nerja.
Answer capsule: A long-term (LAU) let in a Costa del Sol town typically yields 3.5%–5% gross on a calm, hands-off basis with a single tenant. A holiday rental (VFT) can reach 6%–9% gross but demands a Junta de Andalucía licence, far more management (15%–30% of income), seasonality and higher tenant turnover. For most absentee owners, long-term wins on simplicity; holiday wins on headline income only after costs.
The two legal frameworks
A long-term let falls under the Ley de Arrendamientos Urbanos (LAU), the national residential tenancy law. Contracts are habitually for 12 months and renew automatically up to five years (seven if the landlord is a company), with rent rises capped to an official index. The tenant has strong protections, which is exactly what makes this route low-effort but slow to unwind.
A holiday rental is governed in Andalusia by Decreto 28/2016 and its later reforms, administered by the Junta de Andalucía through the Registro de Turismo de Andalucía (RTA). Your property receives a VFT (Vivienda con Fines Turísticos) registration number, which must appear on every Airbnb, Booking.com or Vrbo listing. This is the Andalusian system — do not confuse it with Valencia’s VUT/VT regime, which is a different region entirely.
Yield: the headline numbers
Take a two-bedroom apartment near the beach in Fuengirola or Benalmádena worth around €280,000. On a long-term contract you might achieve €1,100–€1,400 per month, roughly €13,000–€16,000 a year, or about 4.5%–5.5% gross before costs. It is steady, predictable and arrives whether it is January or August.
The same flat as a holiday rental might command €110–€160 per night in shoulder season and €180–€260 in peak July and August. At a realistic 60%–70% annual occupancy, gross income can reach €22,000–€30,000 — a headline yield of 7%–10%. Marbella and Estepona front-line or Sotogrande properties push higher still. But that gross figure is misleading until you subtract the real cost of running it.
Where the holiday-rental gross disappears
Holiday income is eaten by costs the long-term landlord never sees: cleaning between every stay (€45–€90 per turnover), laundry, welcome and check-in service, consumables, platform commissions (Airbnb and Booking typically take 15%–18% combined), higher utility bills (you pay them, not the guest), and professional management. A full holiday-management agency on the Costa del Sol charges 18%–30% of gross income. Net, a strong holiday rental often lands at 5%–7% — still ahead of long-term, but the gap narrows sharply, and it is far from passive.
Management effort: the absentee owner’s real question
This is where the decision usually turns. A long-term tenant in Mijas or Torremolinos pays monthly, lives in the property, and reports problems. Your involvement might be a few hours a year plus an annual inspection. A keyholding or light-management firm charging €40–€90 a month can handle the rest from afar.
A holiday rental is a small hospitality business. Guests arrive and leave weekly, sometimes more often, each needing check-in, cleaning, key handover, troubleshooting at midnight, and five-star review management. From abroad this is simply not feasible to self-manage, so you will pay an agency. Factor that agency cost into every yield comparison, because without it the holiday route is not a realistic option for an absentee owner.
The VFT licence and legal obligations
To let short term legally in Andalusia you must register the property with the RTA and obtain a VFT number before advertising. The property needs a valid licence of first occupation, air conditioning in habitable rooms for summer and heating for winter, first-aid kit, guest information and complaint forms (hojas de reclamaciones). Each guest’s ID must be registered with the authorities within 24 hours via the national SES.Hospedajes platform. Many communities of owners on the Costa del Sol have voted, under the reformed Ley de Propiedad Horizontal, to restrict or ban tourist lets — check your community statutes before you commit, because a three-fifths majority can now block VFT activity in the building. Several municipalities are also tightening or pausing new registrations, so confirm local rules with a gestor.
Taxes
As a non-resident EU/EEA owner you declare rental income on Modelo 210. EU/EEA residents are taxed at 19% on net income and may deduct expenses proportionally; non-EU residents (relevant for British owners post-Brexit) are taxed at 24% on gross income with no deductions — a meaningful disadvantage that often tips British owners toward long-term, where the income, though lower, is simpler to handle. Holiday rentals may also trigger IVA if you provide hotel-style services. Tax treatment is personal and changes frequently, so use a local gestor or abogado rather than relying on a guide — this article is general information, not advice for your situation.
Tenant risk and seasonality
Long-term letting carries one feared scenario: the non-paying tenant. Eviction (desahucio) through the Spanish courts can take 8–18 months, and vulnerable tenants may be granted extensions. Thorough referencing, a solvency check and ideally rental-default insurance (impago de alquiler, around €250–€450 a year) are essential.
Holiday rentals avoid that tail risk but introduce seasonality. The Costa del Sol enjoys a long season, yet a Nerja or Estepona flat can sit half-empty from November to February, and your income swings month to month. Wear and tear is higher with constant turnover, and a single bad review can dent bookings for months.
So which suits an absentee owner?
If you value predictability, minimal involvement and a clean tax position — especially as a British owner facing the 24% gross rate — long-term letting is usually the sensible choice on the Costa del Sol. You trade a few points of yield for genuine peace of mind. If your property is in a prime tourist spot (Marbella old town, Nerja beachfront, central Fuengirola), you have a reliable management agency, and your community permits VFT, holiday letting can deliver a stronger net return and keep some weeks free for your own use. Many German and Dutch owners split the difference: holiday-let the summer, long-let or leave empty the winter.
If you would like an honest, no-obligation view on which route fits your specific property, town and tax status, get in touch through Costa del Sol Habitat. We will connect you with vetted local property managers, gestores and lawyers who know your municipality’s rules — a free first conversation, with no pressure to proceed.