15 Best Places to Buy Vacation Rental Property in Europe in 2026

How to assess value when buying a vacation rental property in Europe

For a buyer in the United States, knowing where to invest in Europe can be a bit of a challenge. Many different variables—such as currency, foreign tax, and vacation rental laws—vary by country. To help make this easier to understand, we’ve broken our assessment into the following major categories to help you find the best places to buy an Airbnb property in Europe.

Cap rate

The capitalization—also known as “cap”—rate is a relatively simple metric that allows investors to compare different housing markets. This real estate profitability metric allows investors to see where the best opportunities are to earn the most rental income possible. While they aren’t the only indicator of success, they do play a large role in finding the best vacation rental markets.

You can calculate the cap rate of a property by dividing its expected net operating income by its current market value. We’ve broken it down into a simple formula:

Cap Rate = Net Operating Income (NOI) / Current Market Value (CMV)

Remember that determining your NOI requires subtracting your operating expenses from your revenue. It’s important to keep in mind that operating expenses vary from host to host, and you may incur additional costs that we haven’t taken into account here.

Demand

Demand is arguably the most important factor, both within Europe and in other international markets. There are many reasons why vacation rentals are good investments, but demand sits at the top.

If the demand in your area is high, your property is far more likely to keep a full calendar than a place that doesn’t get many visitors. There are a few ways to gauge demand for vacation rentals in your area, but the one we’ll be focusing on here is occupancy rates.

Seasonality

Many prospective buyers are tempted to head straight for the coast. While beach vacation rentals are a good investment, those looking to buy 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.

Should you invest in a vacation rental in the city center or further outside?

Deciding whether to invest in a vacation rental in the city center or in a more outlying area depends on several factors, including your personal preferences, budget, and long-term goals. Properties in central locations typically have much higher prices per square meter, sometimes nearly twice as expensive, but they often allow you to charge higher nightly rates.

While many guests want to stay close to the main attractions and therefore prefer central locations, others value peace and quiet or more affordable accommodation and choose apartments farther from the center.

For our calculations, we used the average occupancy rate and return on investment for each municipality. As a result, the average price per square meter reflects the entire city or municipality and may be higher in the city center.

Top vacation rental markets in Europe for 2026

If you’re considering investing in a vacation rental property in Europe but haven’t yet decided on a location, here we cover the 15 best places to invest in Europe in 2026.

We analyzed data from AirDNA and numerous real estate providers (including Idealista and others) to determine which locations attract vacationers and paid particular attention to existing short-term rental restrictions in these areas. While we can’t predict which cities will guarantee you high profits, we recommend considering an investment in the following cities based on the data.

Our analysis is based on:

• Location attractiveness
• Average occupancy rate (minimum 50%)
• Average price per night
• Average price per m² (with further calculations based on an 80 m² property)
• A flat rate of 30% for operating and maintenance costs

The ranking of the locations is not an evaluation and does not mean that one place is better or worse than another.

1. Colmar, France

• Capitalization rate: 9.3%
• Bookout rate: 60%
• Price per m²: €2,429
• Price per night: €118

Colmar lies in northeastern France near the German border and is one of the most beautiful cities in Alsace. Half-timbered houses, flower-adorned balconies, and canals in the “Little Venice” district give the city its fairytale character.

Colmar is a popular destination year-round, in summer for its wine route and in winter for its famous Christmas market. The combination of historical charm, culinary tradition, and consistently high tourist demand makes Colmar an attractive location for vacation rentals, especially in the old town or along the Alsatian Wine Route.

2.Xgħajra, Gozo, Malta

• Capitalization rate: 20.90%
• Bookout rate: 71%
• Price per m²: €1,500
• Price per night: €138.30

Xgħajra is a small, tranquil coastal town in Malta, not far from the ferry to the island of Gozo. The town is characterized by rocky coves, clear waters, and a relaxed, local atmosphere, far removed from mass tourism.

Its proximity to Gozo makes it particularly attractive for visitors seeking nature, diving, and authentic island life. At the same time, Malta’s historic cities are easily accessible. The town is especially well-suited for travelers who appreciate peace and quiet, sea views, and a Mediterranean ambiance.

3. Ohrid, North Macedonia

• Capitalization rate: 7%
• Bookout rate: 52%
• Price per m²: €1,500
• Price per night: €44.40

Although North Macedonia is not a member of the European Union, it’s located in Europe. Ohrid, situated in the southwest of the country, is a beautiful city on the shores of the lake of the same name, boasting numerous attractions. Especially during the summer months, it’s a popular destination for both domestic and international tourists.

Ohrid is considered one of the most culturally significant cities in the Balkans. Its old town—with its narrow streets, Byzantine churches, and stone houses, along with the lake itself—is a UNESCO World Heritage Site.

4. Huelva, Spain

• Capitalization rate: 8.6%
• Bookout rate: 63%
• Price per m²: €1,600
• Price per night: €68

Huelva is a city in Spain’s Andalusia region. Its location near the border with Portugal is a key factor in its appeal. Situated on the Atlantic coast, Huelva is renowned for its beautiful beaches and seafood cuisine. Columbus embarked on 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.

While Huelva may not yet be a household name, it’s a popular holiday destination for both international and domestic tourists. Investing in a vacation rental here is very promising, and the price per square meter is relatively low compared to other Spanish locations.

5. Riga, Latvia

• Capitalization rate: 7.51%
• Bookout rate: 65%
• Price per m²: €2,500
• Price per night: €63.40

Our fifth stop is Riga, the capital of Latvia, located on the Baltic Sea. It’s not only the largest city in the Baltics but also a major economic, cultural, and tourist center. Just 30 km away lies the popular Baltic resort of Jūrmala. Real estate prices are relatively affordable, and the tourism industry is growing steadily. There’s no better time to invest in a vacation rental business in Riga than now!

6. Bucharest, Romania

• Capitalization rate: 6.1%
• Bookout rate: 61%
• Price per m²: €1,800
• Price per night: €56.50

Now let’s head to southeast Europe—specifically to Bucharest, the capital of Romania. You might chuckle at this, but the figures are promising. The affordable real estate prices also speak for themselves. The city boasts a vibrant and historic old town with breathtaking architecture, bars, restaurants, and a great nightlife. It’s also becoming increasingly popular with tourists and digital nomads.

7. Tuusula, Finland

• Capitalization rate: 6.4%
• Bookout rate: 55%
• Price per m²: €2,500
• Price per night: €90.60

Tuusula lies approximately 30 kilometers north of Helsinki and is part of the Finnish capital’s metropolitan area. The municipality combines rural tranquility with good connections to Helsinki and the airport. Tuusula is characterized by lakes, forests, and expansive natural landscapes. Lake Tuusulanjärvi, in particular, is a popular recreational area and historically closely linked to Finnish artists. The region played an important role in Finnish cultural history and was home to numerous writers and composers.

8. Sofia, Bulgaria

• Capitalization rate: 6.5%
• Bookout rate: 65%
• Price per m²: €2,400
• Price per night: €52.40

Back to Southeast Europe. We’re 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 lies the Vitosha Mountains, perfect for hiking and winter sports. The city is becoming increasingly attractive not only to tourists but also to business travelers and digital nomads.

9. Frankenthal, Germany

• Capitalization rate: 8.9%
• Bookout rate: 67%
• Price per m²: €2,951
• Price per night: €93.20

Frankenthal belongs to the Rhine-Neckar metropolitan region and is located in close proximity to Mannheim, Ludwigshafen, and Heidelberg. It also sits near the German Wine Route, which attracts many wine lovers and nature enthusiasts each year. This area holds great potential for tourism.

10. Tallinn, Estonia

• Capitalization rate: 5%
• Bookout rate: 60%
• Price per m²: €3,000
• Price per night: €76.30

Tallinn, the capital of Estonia, is a rapidly growing city in the Baltics. It has been attracting countless urban tourists and digital nomads in recent years. Its beautiful old town is a UNESCO World Heritage Site, while the modern Telliskivi district is home to many art galleries and startup hubs. Best of all, Tallinn enjoys consistent year-round demand, ensuring high occupancy rates. The old town borders the sea, and the beaches are just a few kilometers away. A true investment gem.

11. Agios Athansios, Cyprus

• Capitalization rate: 6.88%
• Bookout rate: 78%
• Price per m²: €4,166
• Price per night: €115

Off we go to Cyprus, to an upscale residential area above Limassol on the southern coast. Its hillside location offers sweeping views of the city and the Mediterranean Sea. The location combines peaceful living with proximity to the city. The center of Limassol, the beach promenade, and the marina are just minutes away. At the same time, the neighborhood is significantly more relaxed and less touristy than the coastal area.

12. Azores, Portugal

• Capitalization rate: 13.1%
• Bookout rate: 65%
• Price per m²: €1,925
• Price per night: €121.80

Located in the middle of the Atlantic Ocean, the Azores are among Europe’s most spectacular travel destinations. Volcanic landscapes, verdant crater lakes, hot springs, and a mild climate year-round make the archipelago particularly attractive to nature lovers and active vacationers. Islands like São Miguel are especially popular for holiday properties, combining excellent infrastructure with strong tourism development. The Azores are not a mass-tourism destination, but rather a growing niche market focused on nature, sustainability, and quality tourism.

13. Sarlat, France

• Capitalization rate: 14.5%
• Bookout rate: 55%
• Price per m²: €1,878
• Price per night: €155

Sarlat-la-Canéda is located in the Dordogne department of the Nouvelle-Aquitaine region and is considered one of the most beautiful medieval towns in France. The remarkably well-preserved old town—with its golden sandstone houses, narrow streets, and lively markets—attracts numerous visitors every year. During the peak season (spring to autumn), Sarlat is a very popular tourist destination, especially with French, British, and Dutch visitors.

14. Stade, Germany

• Capitalization rate: 8.4%
• Bookout rate: 65%
• Price per m²: €2,526
• Average overnight price: €91.20

Stade benefits from its location on the Lower Elbe River and its proximity to the Hamburg metropolitan region, which gives the city both tourist and economic stability. The historic old town—with its Hanseatic port, half-timbered houses, and cultural offerings—is particularly attractive to short-stay tourists and weekend visitors.

15. Alcala de Henares, Spain

• Capitalization rate: 6%
• Bookout rate: 64%
• Price per m²: €2,600
• Price per night: €74.70

Alcalá de Henares lies approximately 35 kilometers northeast of Madrid and is part of the Spanish capital’s metropolitan area. The city is best known as the birthplace of Miguel de Cervantes and for its prestigious university.

The old town of Alcalá de Henares is a UNESCO World Heritage Site, with magnificent university buildings, historic monasteries, and the vibrant Plaza de Cervantes characterizing the cityscape. The University of Alcalá, in particular, is a cultural and architectural highlight. The city blends an academic atmosphere with a lively urban life, featuring cafés, tapas bars, and small boutiques that create an authentic Spanish ambiance.

Are there short-term rental regulations in these cities?

The destinations we suggest are undoubtedly in high demand. However, many well-known cities that might otherwise have made this list now have very strict rules governing vacation rentals. Regulations aimed at preventing the misuse of residential property are common in cities such as Madrid, Barcelona, Rome, Porto, Lisbon, and the Algarve.

If you comply with each city’s regulations, these destinations can still offer strong tourism demand. However, opening new vacation rentals in these locations can be challenging due to licensing limits and regulatory hurdles.

For this reason, the cities we recommend in this article generally present fewer barriers to launching new vacation rentals. In many cases, they are located near major tourist hotspots, where property prices remain relatively affordable, and the regulatory environment is more manageable.

Takeaways

If Europe has been high on your wish list for a vacation rental investment, consider one of these top 15 destinations. Striking a balance between a beautiful location and competitive pricing, you’ll find that any of these 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.

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