1. Taxes
This might not sound like a hidden cost since you probably know taxes must be paid — but do you know exactly how much? In Spain there are several, depending on whether you’re a resident or non-resident. In both cases, you’ll need to pay community fees and property tax (IBI).
- Residents pay personal income tax (IRPF).
- Non-residents pay non-resident income tax (IRNR) and may also be subject to a wealth tax.
2. Commission
If you want your vacation rental to have enough exposure, it’s usually best to work with OTAs (Online Travel Agencies) such as Airbnb, Booking.com, or HomeAway. Each has its own advantages. Whichever you choose, commissions will always apply.
Having a strategy helps you understand which platform works best for you and adapts better to your needs.
3. Marketing
Whether you work with OTAs or focus on a direct booking strategy, there will always be marketing costs.
To compete, your property needs to look its best: professional photos, a well-written description, and an attractive listing are essential. If you’re not a professional photographer or copywriter, hiring one will make a difference.
Direct booking strategies often cost even more — building and maintaining your own website, running ads, and keeping social media accounts up to date all require investment.
4. Cleaning and laundry
Cleaning and laundry are needed after every stay. Costs vary depending on whether you do it yourself or hire a company.
If you handle it personally, consider the cost of supplies and, of course, your time. If you hire a company, factor in not only the service fee but also the time spent managing and supervising their work.
Most booking platforms allow you to add a separate cleaning fee — guests won’t find this unusual. Don’t fold the cleaning cost into your nightly rate, as it will make your property look more expensive at first glance.
Also, think about how costs balance with shorter stays: if expenses are too high for one-night stays, consider setting a minimum stay of two or three nights.
5. Amenities
Guest experience is key to building a successful vacation rental business. Essential items are a must, but quality appliances or décor upgrades can go a long way.
Some amenities are one-time purchases, but consumables — toilet paper, soap, dishwashing liquid — are recurring costs. Small as they may seem, they add up and should be considered. Having them ready ensures a smoother guest experience.
6. Maintenance
With guests coming and going, accidents can happen — but even without them, unexpected costs arise. Boilers break, furniture wears down, or lightbulbs need changing.
Keep a budget for emergencies, and don’t forget regular updates like fresh paint, new linens, pillows, and towels every few years.
7. Insurance
It’s clear you’ll need insurance for your vacation rental — but what kind, and at what cost? Policies vary depending on the apartment and the provider. Take the time to research, compare options, and choose what fits best with your revenue strategy.
8. Time = money
Managing everything yourself takes time — time you could be spending elsewhere. That’s why the saying “time is money” is especially true in vacation rental management.
Even if it isn’t a direct cost, your time has value. If managing the property takes too much of it, consider working with a property management company. They handle most of these tasks in exchange for a commission — which, when you consider the time saved and revenue maximized, may be more cost-effective than it seems.