Short, mid or long-term rental in Portugal: which earns more?

Short-term rental, mid-term or traditional letting? There is no one-size-fits-all model: there is the right model for each property, area and owner. The choice affects revenue, but also the time you will spend on the property, the risk you are willing to take and the rules you have to follow. We compare the three models to help you decide.

The three models at a glance

Short-term: more revenue, more management

Short-term rental (alojamento local, AL) is the model with the highest revenue potential, especially in tourist areas such as Lisbon, Porto, Cascais and the Algarve. On the other hand, it requires a short-term rental registration, compliance with safety requirements, management of the taxa municipal turística (municipal tourist tax) and a round-the-clock operation: cleaning, check-ins, communication in several languages and fast maintenance.

Best suited to: well-located properties in tourist areas, owners who want to use the home for a few weeks a year and those who accept some variation in revenue from month to month.

If you do not have a short-term rental licence and would like to earn from your property with short stays, contact us directly to find out about the alternatives available.

When running the numbers, remember that short and mid-term bookings come mainly through booking platforms, which retain, on average, around 15%. That amount is always deducted from what the owner receives and must be factored into any comparison with a long-term rent.

See the estimates by area, already net of platform commissions, in how much a short-term rental earns in 2026.

Mid-term: the balance between the two

Mid-term letting, for a few weeks or months, targets digital nomads, relocated professionals, international students and families on the move. It is done with a tenancy agreement for temporary purposes (arrendamento para fins transitórios), with no need for a short-term rental licence and with lower guest turnover. If you do have a short-term rental licence, you can also choose this option if it suits you better.

Monthly revenue is usually lower than short-term rental in the high season, but higher than traditional letting, and operating costs are, in general, much lower. It also works well as a complement: tourists in summer, mid-term in winter.

Best suited to: properties near business districts, universities or hospitals; areas where new short-term rentals can no longer be opened; and owners who want income above traditional letting, but with less work.

Long-term: stability and simplicity

Traditional residential letting offers the most predictable revenue and the simplest management: one tenant, one rent a month, few operating expenses. On the other hand, the rent tends to be lower than in the other models, the owner loses the flexibility to use the property, and the risk is concentrated in a single tenant, which makes good tenant screening and a well-drafted contract essential.

Best suited to: those looking for passive income, properties in residential areas with little tourist demand and owners who do not want to follow the property’s day-to-day running.

How preparing the property differs

The three models call for homes prepared in different ways:

• Short-term: a fully equipped kitchen, bed and bath linen, fast internet, a smart lock or key safe, the mandatory safety kit and décor that photographs well.
• Mid-term: everything a guest needs to live and work: a comfortable desk and chair, good internet, a washing machine, storage and a functional kitchen. Décor matters less; everyday comfort matters more.
• Long-term: the property can be let furnished or unfurnished. The essentials are that it is in good condition, with a valid energy certificate, and has a well-drafted contract with clear deposit and maintenance rules.

An example: the same T1 in Lisbon under all three models

Imagine a furnished T1 (one-bedroom) near central Lisbon. As a short-term rental, and if it has an AL licence, it is the model with the highest potential revenue, with peaks in spring and summer. As a mid-term rental, it can be let to foreign professionals for three to six months, with steadier monthly revenue and four or five guest changeovers a year instead of dozens. As a long-term rental, you get a fixed rent for at least a year, with no cleaning or check-ins, but without being able to use the home and with lower revenue.

There is no single answer: in a parish under containment, mid-term may be the best option; in a building with strong tourist demand and no restrictions, short-term rental tends to be the best fit; for anyone who wants zero hassle, long-term is the most stable.

How to choose: five questions

1. Does the area have tourist demand all year round? If so, short-term has more potential. If it is seasonal, consider combining it with mid-term.
2. Can a short-term rental be registered in your parish? In áreas de contenção (containment areas), mid-term and long-term may be the best options.
3. Do you want to use the property? Only short-term lets you block dates whenever you like.
4. How much time do you want to spend on it? With professional management, any of the models can be practically passive; without it, short-term is almost a part-time job.
5. What is your risk profile? More revenue means more variation. Long-term trades potential for stability.

Frequently asked questions

Do I need a short-term rental licence to let by the month?

No, if the letting is done with a tenancy agreement for temporary purposes and not as a tourist accommodation service. Always check which form of contract best suits your case.

Can I change model later?

Yes. Many owners start with short-term rental and move to mid or long-term, or the other way round. At BnBird we handle that transition and keep the same team.

Is tax the same under all three models?

No. Short-term rental is taxed as a business activity (category B of IRS, personal income tax, or IRC, corporate income tax, in a company), while rent from letting is property income (category F), with its own rules and rates. Speak to your accountant before deciding.

Not sure which to choose?

In a free assessment, we compare the three models using your property’s real figures. Request your assessment, try the simulator or see BnBird’s management plans.

General information, as of October 2026. It does not replace legal or tax advice for your case.