Between the stunning sights of the Swiss Alps and the dreamy cruises down the Venetian canals, Europe has always been a vacation hot spot. With many cities to love—like Rome, Paris, Berlin, and Barcelona—it’s no wonder that investors are flocking to Europe to purchase vacation rental property.
If you’re in this boat, you’ve come to the right place. We’re stepping outside the typical city scenes and giving you the most up-and-coming investment opportunities in Europe in 2025.
Don’t see the form to download our vacation rental business plan template? Click here.
How to assess value when buying a vacation rental property in Europe
For the U.S. buyer, discovering where to invest in Europe can be a bit of a challenge. Depending on the country, many different variables present themselves, such as currency, foreign tax, and vacation rental laws.
To streamline the measures for success and investability, we’ve broken our assessment into the following major factors to find the best places to buy Airbnb property in Europe.
Cap rate
The capitalization (or “cap”) rate is a relatively simple real estate profitability metric that allows investors to compare different housing markets and decide which offers the best opportunities to make money. Although not the only indicator of success, it’s an important marker for the best vacation rental markets.
You can find the cap rate of a property by dividing its expected net operating income by its current market value:
Cap Rate = Net Operating Income (NOI) / Current Market Value (CMV)
Note that determining your NOI requires you to subtract your operating expenses from your revenue. Since operating expenses vary widely and everyone runs their vacation rental businesses differently, we’ve used average revenue in place of NOI. However, keep in mind that your business will incur additional costs that we haven’t taken into account here.
Demand
This is arguably the most important factor, both in Europe and internationally. There are many reasons why vacation rentals are good investments, but demand sits at the top.
If demand in the area is high, your property is far more likely to get booked than a place that’s completely unknown to travelers. You can assess demand for vacation rentals in numerous ways, but we’ll be looking at occupancy rates specifically.
Seasonality
Many prospective buyers are tempted to head straight for the coast. While beach vacation rentals are a good investment, investors must be wary of their seasonality. If you’re ill-prepared for a slow season, you could end up losing more than your initial investment.
Ideally, your vacation rental should have consistent income throughout the year. Destination locations that aren’t weather-dependent and cities with tourists year-round create a more consistent flow of income and may be better suited for new investors.
ROI
This is a riskier measure, as you’ll never know your true return on investment (ROI) until you’ve signed the deed and opened for business. Fortunately, there are ways to evaluate the worth of your investment before making the final decision.
Quite simply, you can calculate ROI by subtracting your earnings from your initial investment. In practice, it’s hard to tell what those earnings are before you get started. But getting a rough estimate of what you would earn helps you avoid going into the investment blindly.
By looking at listing sites and taking note of the average price per night for similar properties in the area, then factoring in how many nights on average you anticipate your property to be booked, you can get a vague idea of what the raw income would look like. Compare that with your overhead and cost of investment, and you can get a better feel for whether the investment is worth it.
Top vacation rental markets in Europe for 2025
Thinking about investing in a vacation rental in Europe? We’ve analyzed data from AirDNA and numerous real estate providers to find the top 10 best cities in Europe to buy rental property.
| Location | Occupancy rate | Price per m² | Price per night | Cap rate |
| Tenerife, Canary Islands, Spain | 70% | €2,700 | €122 | 14.17% |
| Lanzarote, Canary Islands, Spain | 70% | €2,613 | €93 | 9.09% |
| Girona, Spain | 73% | €2,672 | €140 | 14.20% |
| Huelva, Spain | 53% | €1,283 | €83 | 12.52% |
| Riga, Latvia | 59% | €1,457 | €72 | 16.46% |
| Bucharest, Romania | 53% | €1,283 | €83 | 12.52% |
| Belgrade, Serbia | 53% | €2,600 | €69 | 6.42% |
| Sofia, Bulgaria | 58% | €1,840 | €62 | 7.31% |
| Sunny Beach, Bulgaria | 53% | €3,481 | €320 | 7.80% |
| Sexten – Sesto, Italy | 67% | €2,899 | €132 | 11.14% |
*80m² equals roughly 262 ft².
Note: We’ve listed average home prices based on price per meter squared for consistency with other information you’ll find online when researching European investment properties. However, for U.S. investors who’d like to get an idea of the price per square foot, simply divide the price per square meter by 10.764.
For example, the average price per square meter for properties in Belgrade, Serbia, is €2,600. To get the price per square foot, simply use the following equation:
€2,600 / 10.764 = €241.54 per ft²
1. Tenerife, Canary Islands, Spain
- Capitalization rate: 14.17%
- Occupancy rate: 70%
- Price per m²: 122 €
- Price per night: 122 €
Tenerife, the largest and most diverse of the seven Canary Islands, has long been a popular travel destination, particularly due to its subtropical maritime climate. It’s one of the few places in Europe to escape the European winter and enjoy pleasant temperatures.
Of course, the island has much more to offer, from water sports and hikes in breathtaking natural surroundings to culinary experiences and cultural highlights. The island has attracted many holidaymakers and expats, especially in recent years. Due to its mild climate, the island attracts tourists year-round, hence the relatively high booking rate.
Important note: The Canary Islands are currently one of the few autonomous regions in Spain where no restrictions on tourist rentals are in place! However, it is expected that corresponding legal regulations will come into force here in the near future. Additionally, a new law came into effect in Spain in April 2025, which applies nationwide: If you want to operate a vacation rental business and your property is located in a complex with multiple units, 60% of the owners (neighbors) must approve your plan; otherwise, it is illegal to offer your property for vacation rental. Furthermore, the law allows neighbors to set additional regulations, such as maximum guest numbers, check-in times, and noise restrictions. They can also demand that the owner pay 20% more community fees. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
2. Lanzarote, Canary Islands, Spain
- Capitalization rate: 9.09%
- Occupancy rate: 70%
- Price per m²: €2,613
- Price per night: 93 €
We’ve added a second Canary Island to our list: Lanzarote, the most volcanic of all the Canary Islands. It’s always been a popular destination with beautiful beaches and a relaxing atmosphere. Lanzarote is smaller than Tenerife but no less attractive. The island is especially popular with surfers.
Considering the few restrictions in place in many regions of this popular holiday destination, along with the mild climate and occupancy rate, the Canary Islands remain an attractive investment opportunity.
Important note: Further restrictions are expected to come into force here in the near future. Furthermore, the law in force in Spain from April 2025 will also apply here. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
3. Girona, Spain
- Capitalization rate: 14.20%
- Occupancy rate: 73%
- Price per m²: €2,672
- Price per night: 140 €
We’re staying in Spain. This time, we’re heading to the mainland, to Girona.
Girona is located about 63 miles northeast of Barcelona and is now considered a local secret for escaping the overcrowded tourism of big cities. The city is no less attractive than Barcelona, and its medieval old town offers impressive architecture and a rich history.
This is a real pro tip for investors looking for a quiet alternative to Barcelona while still benefiting from a prime location.
Important note: Specific regulations apply to short-term rentals in Girona. Owners must register their vacation rentals with the Catalan Tourism Registry and meet minimum standards such as drinking water, safety, and amenities. Guests must be registered with the authorities. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
4. Huelva, Spain
- Capitalization rate: 12.52%
- Occupancy rate: 53%
- Price per m²: 1,283 €
- Price per night: 83 €
Let’s change the saying a bit: all good things come in fours. Our fourth and final location in Spain is also on the mainland. It’s in Andalusia, near the border with Portugal—a feature that makes this place so attractive.
Huelva lies on the Atlantic coast and is known for its beautiful beaches and seafood cuisine. Columbus began his voyage to America from here in 1492. The Costa de la Luz, with its endless sandy beaches and natural parks, is ideal for water sports and relaxation.
Huelva is not yet quite on the radar of international tourists, but it’s a popular holiday destination among locals. Investing in a vacation rental business here is very promising, and the price per m² is low compared to other Spanish locations.
Important note: In Huelva, as throughout Andalusia, specific regulations apply to short-term residential rentals. The property must be registered in the region’s tourism registry, and certain minimum standards must be met. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
5. Riga, Latvia
- Capitalization rate: 16.46%
- Occupancy rate: 59%
- Price per m²: 1,457 €
- Price per night: 72 €
With our number five, we’ve arrived in the Baltic. Riga, the capital of Latvia, is located on the Baltic Sea. It’s the largest city in the Baltic and an important economic, cultural, and tourist center.
Just 16 miles away, the popular Baltic Sea resort town of Jūrmala beckons. Real estate prices are comparatively affordable, and the tourism industry is growing steadily. When, if not now, is the best time to invest in a vacation rental business in Riga?
Important note: Riga has no strict restrictions on vacation rentals. Vacation rental owners must register their accommodations with the relevant authorities and ensure certain minimum standards. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
6. Bucharest, Romania
- Capitalization rate: 12.52%
- Occupancy rate: 53%
- Price per m²: 1,283 €
- Price per night: 83 €
Next up is Bucharest, the capital of Romania. You might chuckle a bit, but the numbers are promising. The affordable real estate prices also speak for themselves.
The city offers a vibrant and historic old town with stunning architecture, bars, restaurants, and great nightlife. Bucharest is also becoming increasingly popular for tourism and digital nomads.
Important note: If you wish to rent out vacation accommodations, you must obtain a classification certificate from the Romanian Ministry of Tourism. This certificate confirms the level of comfort and quality of the services offered. The classification is limited to a maximum of seven rooms for private individuals. Additional regulations apply if you’re looking to rent out more than seven rooms. A key requirement for certification is the consent of the homeowners’ association or the immediate neighbors to conduct the rental activity. We advise you to regularly inform yourself about current legal regulations and changes. Updated as of June 2025
7. Belgrade, Serbia
- Capitalization rate: 6.42%
- Occupancy rate: 53%
- Price per m²: €2,600
- Price per night: 69 €
Now, we move on to the Balkans. Belgrade, the capital of Serbia, is located in the heart of the Balkans and offers a rich history, cultural highlights, vibrant nightlife, and tremendous growth potential.
Belgrade is becoming increasingly popular as a party and culture city, attracting millions of visitors annually. Compared to Western Europe, the city offers an exciting investment environment for short-term rentals.
Important note: There are currently no restrictions on short-term rentals in Belgrade. Due to the increasing popularity and availability of housing, regulations may be introduced in the future. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
8. Sofia, Bulgaria
- Capitalization rate: 7.31%
- Occupancy rate: 58%
- Price per m²: 1,840 €
- Price per night: 62 €
We continue in Southeastern Europe and are now in Sofia, the capital of Bulgaria. Sofia boasts a rich history and is one of the oldest cities in Europe, with Roman, Ottoman, and Soviet influences. Near the capital lie the Vitosha Mountains, which are perfect for hiking and winter sports. The city is becoming increasingly attractive for tourists, business travelers, and digital nomads.
Important note: There are currently no restrictions on short-term rentals in Sofia. Due to the increasing popularity and availability of housing, regulations may be introduced in the future. However, it is recommended that the relevant fire department inspect the property. We advise you to check for current legal regulations and changes regularly. Updated as of June 2025
9. Sunny Beach, Bulgaria
- Capitalization rate: 7.80%
- Occupancy rate: 53%
- Price per m²: €3,481
- Price per night: 320 €
We’re still in Bulgaria and moving toward the Bulgarian Black Sea coast. Sunny Beach is a popular holiday resort close to the historic UNESCO World Heritage town of Nessebar.
Sunny Beach boasts a long sandy beach (5 miles) and is particularly popular with young vacationers, families, and partygoers. Although the region is highly seasonal, with high demand in the summer and a quieter winter, it’s an extremely attractive investment location.
Important note: There are currently no restrictions on short-term rentals in Sunny Beach. We advise you to regularly check for current legal regulations and changes. Updated as of June 2025
10. Sexten – Sesto, Italy
- Capitalization rate: 11.14%
- Occupancy rate: 67%
- Price per m²: €2,899
- Price per night: 132 €
Ciao! We’re heading to Italy. It’s one of the most popular travel destinations in the world. Only, we’re not on the coast, but in the natural paradise of the Dolomites in South Tyrol, close to the Austrian border.
Sexten is located at an altitude of 1,300 meters in the Alta Pusteria Valley and is part of the popular Three Peaks Dolomites region. Nothing more needs to be said. While investors must observe certain regulations and restrictions, this location remains ideal for all investors who value quality over quantity.
Important note: Anyone wishing to use a property in Sesto for tourist rental should ensure that the apartment is not subject to a convention and can be classified as a vacation home. Furthermore, investors must observe official registration requirements, tax regulations, and building regulations. A legal review is recommended before purchasing to avoid restrictions on use. Updated as of June 2025
Takeaways
If Europe has been high on your wish list for a vacation rental investment, consider one of these top 10 destinations. Striking a balance between a beautiful location and competitive pricing, you’ll find that any of these 10 cities will make you some serious vacation rental profits.
Once you take the plunge and buy a property in Europe, you’ll need vacation rental software to run your business. With Lodgify, you can manage your bookings, connect with major booking platforms like Airbnb and Vrbo, and create your website from one convenient place. Try Lodgify for free to see for yourself with a seven-day trial, product demo, or demo call.
Don’t see the form to download our vacation rental business plan template? Click here.
