Long-Term or Short-Term Rentals in Cyprus: Which Works Better for Property Owners?

Short-term rentals in Cyprus can generate more revenue, but after commissions, utilities, cleaning and management, owners may keep less than they would from a long-term tenancy. Choose a rental model by comparing annual cash flow, property requirements and the time needed to manage it.

Comparing “€100 per night or €1,500 per month” looks straightforward only at first glance. An apartment will not necessarily be occupied every night, and the two rental models have different cost structures.

Here is how to compare the options for an apartment in Limassol, Paphos, Larnaca or another location in the Republic of Cyprus, and which questions to ask before buying a rental property.

What each rental model involves

A long-term agreement does not guarantee a trouble-free tenancy, and listing on a booking platform does not guarantee guests. Both options require a realistic budget.

First, check whether your chosen rental model is permitted

For tourist accommodation falling within the self-service accommodation category, the Cyprus Deputy Ministry of Tourism requires registration and a registration number. According to its official guidance, that number must appear in advertising, promotional material and relevant transactions.

Before publishing a listing, check how the requirements apply to your apartment and whether it can be registered. A neighbouring property being rented to tourists does not establish that your property meets the requirements.

• Check the apartment’s documents and permitted use.
• Review the applicable rules of the building or development.
• Confirm that insurance covers the intended activity.
• If you are not the owner, check your authority and any necessary consents.
• Discuss tax reporting with an appropriately qualified adviser.

Sources: Deputy Ministry of Tourism — registration and advertising requirements ; application to register self-service accommodation .

Which costs to include for a long-term rental

Start with annual rental receipts. Then deduct the expenses that remain the owner’s responsibility under the agreement and the actual circumstances.

• Finding a tenant and preparing the agreement.
• Management, if handled by an external company.
• Communal charges and local charges paid by the owner.
• Insurance.
• Repairs and equipment maintenance.
• Costs incurred between tenancies.

The agreement should clearly state who pays for electricity, water, internet and communal expenses. Do not assume that the arrangements advertised for one apartment apply to another.

A refundable tenant security deposit should not be counted as income in the same way as rent: the owner may remain obliged to return it.

Which additional costs arise with short-term rentals?

For short stays, look beyond the manager’s headline percentage. Request a complete list of included services and additional charges.

• Booking platform and payment processing fees.
• Booking management and guest communication.
• Cleaning, laundry and consumables.
• Electricity, water and internet.
• Maintenance of locks, appliances and equipment.
• Replacement of linen, kitchenware and furnishings.
• Insurance and necessary administrative costs.

If guests pay a separate cleaning fee, treat the related receipts and expenses consistently. Do not exclude the cleaning cost while keeping the cleaning fee within your income.

An example: higher revenue, but less left for the owner

The following is a hypothetical comparison for one apartment. All rents, fees, expenses and occupancy figures are illustrative assumptions. They are not market averages or a forecast for a particular property.

The calculation covers one year before the owner’s taxes and loan payments. The initial purchase and setup costs are excluded.

In this example, short-term letting generates €3,500 more annual revenue, but leaves the owner with €3,040 less after the listed expenses. Different rates, occupancy and costs could change the result.

How many nights would match the long-term rental result?

In this hypothetical model, 70% of revenue remains after the two percentage-based fees. The other included annual expenses total €4,800. To achieve the same €12,240 remaining amount, the required revenue is:

This figure applies only within the example’s assumptions. Higher occupancy can increase utility bills, wear and maintenance costs. The actual number of nights needed to achieve a comparable result may therefore be higher.

If nightly rates vary by season, calculate each month separately. Multiplying the highest summer rate by the entire year does not produce a realistic annual projection.

What to request instead of a promise of “high occupancy”

• Monthly receipts for a full year, where a rental history exists.
• The number of paid nights and the actual average nightly rate.
• Periods blocked for the owner’s use or maintenance.
• Commissions, refunds and discounts.
• Actual utility and maintenance bills.
• An explanation of how comparable the properties used in any forecast really are.

Always check how an occupancy percentage is calculated. If weeks reserved for the owner have been removed, occupancy across available booking dates will differ from occupancy across all 365 days.

For long-term rentals, also examine actual receipts and expenses. An advertised asking rent does not establish that the apartment will be let on those terms.

How does using the apartment yourself affect the calculation?

Short-term letting can allow you to reserve dates for personal use if the calendar is managed accordingly. However, those dates have a financial cost: the apartment is unavailable to paying guests.

If you intend to visit during the most sought-after weeks, include that assumption in the forecast before buying. The same dates cannot count towards both guest income and your own holiday.

With a long-term tenancy, the owner’s access is governed by the agreement and applicable law. Do not assume that the apartment can be made vacant whenever it suits you.

What to consider in Limassol, Paphos and Larnaca

Choosing a rental model by city name alone is not enough. Consider the specific address and the needs of its potential occupants.

For permanent residents, assess journeys to work, shops and schools, parking, storage and the practicality of the layout. For short stays, consider access to the beach, attractions and transport, along with straightforward self-check-in.

An apartment that suits a holiday may not be equally convenient for year-round living. Equally, the practical advantages of a residential area may matter more to a long-term tenant than a view that looks attractive in holiday photographs.

Calculate taxes and initial investment separately

These examples do not show final profit after every obligation. Tax treatment depends on the owner’s status, the nature of the activity and applicable rules. Do not transfer a tax calculation from one rental model to another without checking it.

Separately review VAT, any business registration requirements and the consequences of changing the apartment’s use if relief was applied when it was purchased.

Source for checking tax treatment: Cyprus Tax Department — rental income .

If holiday letting requires additional furniture, linen, kitchenware and equipment, include them in the initial budget. When calculating the investment yield, use the full cost of purchasing and preparing the apartment.

Five steps to choosing your rental model

1. Check eligibility. Review the documents, registration requirements, building rules and insurance.
2. Prepare two annual budgets. Use the same period and include the full range of costs.
3. Test a less favourable scenario. Allow for fewer paid nights or months, a lower rate and an unexpected repair.
4. Plan the management. Who answers calls, arranges repairs and checks the apartment’s condition?
5. Account for your own plans. Consider personal use, a possible sale and availability on the dates you need.

Frequently asked questions

Are short-term rentals always more profitable?

No. They can generate more revenue while also incurring higher costs. Compare the amount remaining after expenses, then account for taxes, financing and the initial investment.

Can I list the apartment first and register it later?

The Deputy Ministry of Tourism’s official guidance links advertising and letting self-service accommodation to registration and obtaining the relevant number. Do not leave these checks until the first bookings arrive.

If I manage the apartment myself, can I exclude management fees?

You may not pay an external manager, but the tasks still need to be done. Account for your own time, availability locally and the cost of assistance when you cannot deal with an issue yourself.

Can I offer holiday lets in summer and longer tenancies in winter?

This approach needs a separate assessment of demand, contractual terms and applicable requirements. Do not automatically assume that a tenant will cover the entire remaining period and leave on your preferred date.

Which matters more: occupancy or the nightly rate?

Both affect revenue, but the final result also depends on expenses. High occupancy achieved through substantial discounts can leave less income than lower occupancy at a different rate.

This article concerns property in the Republic of Cyprus. All financial examples are hypothetical and are not income forecasts or market-rate estimates. Calculations exclude the owner’s taxes, financing and initial investment. Applicable legal and tax requirements should be checked for the individual property and owner.