Short-Term vs. Long-Term Rentals in Greece: Which is More Profitable?

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Thinking about diving into Greece’s rental property market? You’re standing at one of Europe’s most exciting crossroads for real estate investment. The Mediterranean charm, booming tourism, and increasingly favorable regulations make Greece a goldmine—but only if you choose the right rental strategy.

Here’s the straight talk: Your profitability won’t just depend on location or property type. It hinges on understanding which rental model aligns with your investment goals, risk tolerance, and management capacity.

Table of Contents

• Greece’s Rental Market Landscape
• Short-Term Rental Profitability Deep Dive
• Long-Term Rental Strategy Analysis
• Financial Performance Comparison
• Location-Specific Strategies
• Regulatory Framework and Compliance
• Your Investment Roadmap Forward
• Frequently Asked Questions

Greece’s Rental Market Landscape

Ever wondered why Greece’s rental market is suddenly everyone’s favorite topic at investor meetups? The numbers tell a compelling story.

Since 2018, Greece has experienced a remarkable tourism recovery, with visitor numbers reaching 33 million annually—that’s nearly three times the country’s population. This surge directly impacts rental demand, but the real opportunity lies in understanding the seasonal patterns and regional variations.

Market Fundamentals You Need to Know

Tourism-Driven Demand: Greece’s short-term rental market exploded by 340% between 2016 and 2023, according to Inside Airbnb data. But here’s what most investors miss—this growth isn’t uniform across the country.

Local Housing Pressures: Simultaneously, long-term rental demand has intensified due to housing shortages in major cities. Athens and Thessaloniki show particularly strong fundamentals for traditional rentals, with occupancy rates consistently above 95%.

Regulatory Evolution: The Greek government has been fine-tuning short-term rental regulations, creating both opportunities and constraints. The recent cap on new short-term rental licenses in central Athens signals market maturation, not decline.

Investment Climate Reality Check

Quick scenario: Imagine you’re evaluating a €150,000 apartment in Athens’ Koukaki neighborhood. Your decision between short-term and long-term rental could mean the difference between 8% and 15% annual returns. But which path leads where?

The answer isn’t straightforward—it depends on your investor profile, available time, and risk appetite. Let’s break down both strategies with real-world numbers.

Short-Term Rental Profitability Deep Dive

Short-term rentals in Greece can be incredibly lucrative, but they’re also demanding. Think of them as running a small hospitality business rather than passive real estate investment.

Revenue Potential Analysis

Peak Season Performance: During July and August, well-positioned properties in Mykonos or Santorini can command €200-400 per night. Even modest Athens apartments can reach €80-120 nightly during peak tourism months.

Consider Maria’s success story: She purchased a 60-square-meter apartment in Athens’ Plaka district for €180,000 in 2021. Through strategic short-term rental management, she generated €28,000 in gross rental income in 2023—a 15.5% gross yield.

Seasonal Variations: Here’s where many investors stumble. Greek tourism follows predictable patterns:

• High Season (June-September): 80% of annual bookings
• Shoulder Season (April-May, October): 15% of bookings
• Low Season (November-March): 5% of bookings

Operating Cost Realities

Pro Tip: The right preparation isn’t just about maximizing revenue—it’s about managing expenses that can quickly erode profits.

Platform Fees: Airbnb and Booking.com typically charge 12-15% combined (3% from hosts, 12% from guests)

Management Costs: Professional management ranges from 15-25% of gross revenue

Utilities and Maintenance: Expect 8-12% of gross revenue annually

Furnishing and Setup: Initial investment of €8,000-15,000 for quality furnishing

Long-Term Rental Strategy Analysis

Long-term rentals offer the stability many investors crave, especially in Greece’s current economic environment. They’re the tortoise in this investment race—steady, predictable, and surprisingly profitable when managed correctly.

Steady Income Fundamentals

Rental Yields by Region: Athens delivers 4-6% gross yields for long-term rentals, while Thessaloniki offers 5-7%. These numbers might seem modest compared to short-term peaks, but consider the consistency factor.

Take Dimitris’ approach: He owns three apartments in Athens’ Exarchia neighborhood, each generating €650-750 monthly rent. His combined investment of €420,000 produces €26,400 annually with minimal management overhead—a solid 6.3% net yield after expenses.

Tenant Market Dynamics

Growing Demand Drivers:

• Digital nomads choosing Greece for its attractive visa programs
• Young professionals priced out of homeownership
• International students and academic professionals
• Local housing shortage creating sustained demand

Rental Price Trends: Athens has seen 8-12% annual rental price increases since 2020, driven by limited supply and strong demand. This organic growth compounds your returns without the volatility of tourism-dependent income.

Financial Performance Comparison

Let’s cut through the speculation with hard numbers. Here’s how both strategies perform across key financial metrics:

Profitability Visualization: Athens Market Comparison

Location-Specific Strategies

Location isn’t just important—it’s everything. Your rental strategy should align with local market dynamics, and Greece offers distinct opportunities across different regions.

Athens: The Balanced Opportunity

Short-Term Hotspots: Plaka, Monastiraki, and Koukaki neighborhoods excel for short-term rentals, with average occupancy rates of 75-85% annually.

Long-Term Strongholds: Exarchia, Pagrati, and Kypseli offer excellent long-term rental prospects, with consistent demand from locals and international residents.

Real-world insight: Investors who buy property in greece within walking distance of metro stations see 15-20% higher rental yields regardless of strategy choice.

Greek Islands: Short-Term Paradise

Mykonos and Santorini: Premium short-term rental markets with seasonal rates reaching €300-500+ nightly. However, long-term rental demand is virtually non-existent.

Crete and Rhodes: More balanced markets offering both short-term tourism income and year-round resident demand.

Secondary Cities: The Undervalued Play

Thessaloniki, Patras, and Volos present compelling long-term rental opportunities with lower entry costs and strong local demand fundamentals.

Regulatory Framework and Compliance

Navigating Greek rental regulations doesn’t have to be overwhelming. Here’s your essential compliance roadmap:

Short-Term Rental Requirements

Licensing: All short-term rentals require special accommodation registration numbers. New applications in central Athens face restrictions, but opportunities remain in other areas.

Tax Obligations: Short-term rental income faces a 15% withholding tax plus regular income tax rates. However, strategic structuring can optimize your tax burden.

Long-Term Rental Framework

Tenant Rights: Greek law strongly protects long-term tenants, making evictions challenging but rent increases more predictable.

Tax Benefits: Long-term rental income enjoys more favorable tax treatment and potential deductions for maintenance and improvements.

Your Investment Roadmap Forward

Ready to transform your Greek rental property knowledge into profitable action? Success isn’t about choosing the “perfect” strategy—it’s about selecting the approach that matches your specific circumstances and executing it expertly.

Your Strategic Decision Framework

Choose Short-Term Rentals If:

• You can dedicate 10+ hours weekly to property management
• Your target location has strong tourism fundamentals
• You’re comfortable with income volatility for higher return potential
• You have capital for quality furnishing and setup costs

Choose Long-Term Rentals If:

• You prefer passive income with minimal management overhead
• Steady, predictable returns align with your investment goals
• You’re investing in residential areas with strong local demand
• Long-term wealth building takes priority over immediate cash flow

Next Steps for Success

1. Market Research Phase: Spend 2-3 weeks analyzing specific neighborhoods, studying rental comparables, and understanding local demand patterns.

2. Financial Modeling: Create detailed projections for both strategies using real property prices and rental data from your target areas.

3. Professional Network Building: Connect with local property managers, tax advisors, and successful investors who can provide market insights.

4. Regulatory Preparation: Understand licensing requirements and tax obligations before making your first property purchase.

5. Portfolio Strategy Development: Consider starting with one property to test your chosen approach, then scaling based on performance and lessons learned.

The Greek rental market rewards informed, strategic investors who understand both the opportunities and challenges. Whether you choose the higher-yield, higher-maintenance short-term path or the steady, scalable long-term approach, success comes from thorough preparation and consistent execution.

What’s your next move in Greece’s dynamic rental landscape? Your investment journey begins with understanding not just what’s possible, but what’s right for your unique situation and goals.

Frequently Asked Questions

What’s the minimum investment needed for profitable Greek rental property?

For Athens, expect minimum investments of €120,000-150,000 for properties suitable for either rental strategy. Islands require higher entry points of €200,000-300,000, but offer greater short-term rental potential. Factor in additional costs: €8,000-15,000 for short-term rental furnishing, or €2,000-5,000 for long-term rental preparation. Success depends more on location selection and management execution than initial investment size.

How do recent regulatory changes affect rental profitability?

New short-term rental license restrictions in central Athens create scarcity value for existing licensed properties while limiting new competition. This actually benefits current short-term rental owners through reduced supply. Long-term rentals remain largely unaffected by tourism-related regulations. The key is staying compliant with tax obligations and maintaining proper licensing—regulatory changes often create opportunities for prepared investors while challenging those who ignore compliance requirements.

Can foreign investors successfully manage Greek rental properties remotely?

Absolutely, but strategy choice matters significantly. Long-term rentals are easily managed remotely through local property management companies (15-20% of rental income). Short-term rentals require more intensive local support—professional management companies charge 20-30% but handle everything from guest communication to cleaning. Many successful foreign investors use local partnerships or property management firms. The key is building reliable local support networks before purchasing, not after.

Article reviewed by Clara Schneider, Central European REITs | Dividend-Focused Portfolio Architect, on June 6, 2025