Airbnb or regular monthly rent? Which is really more profitable in Tel Aviv?
Every time an investor in Tel Aviv considers renting out an apartment, the inevitable question arises: is it better to rent it out short-term (for example, through Airbnb) or choose regular monthly rent? Each option can generate good profits, but it’s important to carefully evaluate all the variables. Here, I’ll outline the advantages, disadvantages, estimated figures, and comparison models to help you understand what best suits your situation.
What you need to know before deciding
Before diving into the numbers, it’s important to consider:
Local regulation: In Tel Aviv, court rulings and municipal policies sometimes require a special use permit or a business license for short-term rentals. Renting through Airbnb without meeting these requirements may be illegal.
Taxation: All rental income must be reported to the Tax Authority; short-term rentals may be classified as business income, which is subject to relatively high tax rates.
Additional expenses: Costs for maintenance, cleaning, marketing, furniture, electricity, water, etc., are significantly higher in short-term rentals.
Variable occupancy: You won’t always be able to keep the property fully booked throughout the year as you would with a long-term rental.
Real data and examples in Tel Aviv
Here are some published examples that can give you an idea:
| Condition | Regular monthly rent price (for example, a 2–3 room apartment in central Tel Aviv) | Possible income through short-term rental via Airbnb or similar during high-demand periods | Variations / additional costs |
|---|---|---|---|
| Apartment in the city center, on the coastline or nearby, 3–4 rooms | For example, around ₪6,000–8,000 per month | In the same apartment, during the summer season, income could reach around $6,000 per month (about 2–3 times higher than regular rent), if there is very high demand, good design, and quality management. | Higher cleaning expenses, tenant turnover, maintenance, etc. |
| Incomplete occupancy / winter / low-demand days | Regular monthly rent is almost certainly fully occupied over time | On Airbnb, there may be days without bookings, seasonal price drops, and the need for discounts | Cleaning, maintenance, and guest management costs remain fixed |
Comparison between an ideal scenario and a regular scenario
Let’s assume:
- Apartment in central Tel Aviv, 3 rooms, purchase price ₪2,000,000
- Regular monthly rent: ₪7,500 per month → ₪90,000 per year
- Short-term rental via Airbnb / vacation apartment:
- Average occupancy rate: 70% per year (full in July–August, lower in winter)
- Average nightly rate: ₪400–600 (depending on the property’s quality)
- Expected annual income: ~ (₪400 × 365 × 0.70) ≈ ₪102,000–150,000, minus expenses
In comparison: this represents a potential of 20–70% higher income compared to regular monthly rent, under favorable conditions.
Disadvantages and risks of Airbnb / short-term rentals
- Need for active management: more frequent cleaning, guest services, quick problem-solving, and continuous marketing.
- High seasonal fluctuation: months with very low demand.
- Higher fixed costs: premium furniture, utilities, and extensive maintenance.
- Regulation and taxation: as mentioned — you may be exposed to legal liability if you fail to meet requirements such as a special use permit, business license, and tax payments.
When regular monthly rent is still the better option
- If you want stability: steady income throughout the year with no surprises.
- If you don’t have the time or desire to manage the property frequently.
- If tenant turnover and target audience habits are more stable (requiring long-term stays, etc.).
- When the extra profit from Airbnb does not offset the additional risks and expenses.
Summary: Who wins?
If all conditions are favorable — central location, high-quality apartment, good management, and high occupancy — Airbnb or short-term rental can generate significantly higher profits than regular monthly rent. However, it comes with greater risk, variable expenses, and requires active involvement.
Disclaimer
The information, data, and examples presented in this article are intended for general knowledge and educational purposes only. They should not be considered financial, appraisal, legal, or investment advice of any kind.
Any financial action, including property purchase, mortgage, or real estate investment, should be undertaken only after receiving personal professional advice from qualified experts and in accordance with each individual’s personal circumstances.
The authors and the website bear no responsibility for any damage, loss, or decision resulting from the use of the information on the site, in whole or in part.
Reading and using the content constitutes agreement that the information is presented as personal opinion only, and that no claim, demand, or lawsuit shall be filed against the site operators, its authors, or anyone acting on their behalf, under any circumstances.
