Short-Term Rental vs Long-Term Rental in Portugal: Which Is Better for Property Owners in 2026?
- belterraliving
- Nov 27, 2025
- 3 min read
A practical guide for homeowners, investors, and anyone deciding how to rent their property.
Choosing between short-term rentals (Alojamento Local / STR) and long-term rentals (LTR) is one of the most important decisions for property owners in Portugal. Both models can be profitable—but they serve different goals, lifestyles, and risk profiles.
This guide breaks down the key differences, supported by 2024–2025 market data, so you can choose the strategy that best fits your property.
1. Income Potential
Short-Term Rental (STR)
STRs generally provide higher income, especially in tourist-heavy regions like the Algarve, Lisbon, Porto, and Madeira.
According to Turismo de Portugal and local AL market studies:
Average STR gross yield in major cities: 8–12%
In top tourist areas: up to 14–18%
High season (Jun–Sept) can generate 40–50% of annual income
Why STR earns more:
Nightly prices are higher than prorated monthly rents
Demand surges during holidays, festivals, and summer
Guests pay for “experience,” not long-term affordability
Long-Term Rental (LTR)
LTR typically generates stable but lower yields, between 4–7% according to INE (Instituto Nacional de Estatística) and Idealista Rental Index.
Why LTR earns less:
Rent caps in some municipalities
Rental market focused on long-term affordability
Lower pricing flexibility
Winner: STR (if allowed in your area and volatility is acceptable).
2. Occupancy & Stability
STR: Fluctuating but Optimizable
Occupancy varies by season:
High: Summer + holiday periods (Algarve can reach 90%+)
Medium: Spring & autumn (50–70%)
Low: Winter (20–50%, depending on location)
With tools like dynamic pricing (e.g., Airbnb Smart Pricing or dedicated software), occupancy can be optimized.
LTR: High Stability
Once a tenant signs a lease, occupancy is consistent:
Tenancy duration in Portugal averages 26–30 months (INE 2023)
Zero off-season fluctuations
Easier financial forecasting
Winner: LTR (if you value predictability).
3. Legislation & Restrictions
STR Regulations (Alojamento Local)
Portugal has tightened AL rules in major cities, especially Lisbon and Porto, where New AL Registrations (RNAL) are restricted in many central areas.
Municipalities may require:
Specific AL licensing
Safety standards (extinguisher, first-aid kit, signage)
Tourism tax collection for guests
Licensing rules vary by region, so owners must verify with their municipality.
LTR Regulations
LTR is simpler and more stable.
Main requirements:
Standard long-term lease contract
Security deposit rules
Registration with Finanças
Fewer regulatory changes, and less political pressure than STR.
Winner: LTR (simpler and less volatile legally).
4. Guest/Tenant Management
STR: High Touch
STR requires:
24/7 guest communication
Cleaning and laundry after every stay
Check-in/check-out coordination
Handling minor issues (appliances, wifi, instructions)
Professional property management solves this—but it’s a more operationally intense model.
LTR: Low Touch
LTR requires:
Occasional communication
Maintenance coordination
Rent collection
Lease renewals or tenant replacement every 1–3 years
Much lighter daily workload.
Winner: LTR (lower ongoing operations).
5. Wear & Tear
STR
More frequent usage = higher turnover on:
Linens
Furniture
Appliances
But guests stay short periods, so they rarely cause deep damage, and preventive cleaning helps maintain the property.
LTR
Less turnover but higher risk of:
Long-term unnoticed damage
Slow deterioration
Difficulty accessing the property until tenancy ends
Winner: Tie (different forms of wear).
6. Flexibility
STR: Very Flexible
You can:
Block your calendar for personal use
Pause or resume renting
Adjust pricing at any time
Great for second homes or lifestyle properties.
LTR: Not Flexible
Once the lease is signed, the tenant gains significant rights.
Owner flexibility is limited.
Winner: STR (perfect for owners wanting hybrid personal use).
7. Which Strategy Fits Your Profile?
✔ Choose STR if you want:
Maximum income potential
Flexibility to use the property
Revenue that can outperform LTR
A hands-off experience with a property manager
✔ Choose LTR if you want:
Stable, predictable income
Minimal operational involvement
A simpler legal framework
Lower daily workload
8. Hybrid Strategy (rising trend in Portugal)
Many owners now combine both:
Short-term in high season (Jun–Sept)
— maximizes profit
Medium-term (2–6 months) in winter
— stable, less demanding than STR
— popular with digital nomads and retirees
Great for coastal regions like Cascais, Carvoeiro, Lagos, Albufeira, Ericeira.
Conclusion: What’s Best for Your Property?
Both strategies have strong advantages.
The right choice depends on your goals, your property’s location, and how involved you want to be.
If you’re still unsure, Luso Superhost can help you evaluate:
Estimated STR earnings
Estimated LTR rental value
Seasonality impact
Licensing feasibility
Operational load
Vacancy expectations
Your financial goals
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