Investing in Holiday Rentals – A guide to finding your next real estate investment by Stella Studio

The summer holiday season is in full swing, and while you’re lounging on a sun-drenched terrace or hiking through alpine meadows, the savvy businessperson in you might be eyeing potential investments. I can hear you from here going “ah, we should buy a place like this and rent it out while we’re not using it.”

Let’s take that thought seriously and figure out if the place you have in mind is a sound investment, or a doomed enterprise. (Side note: buying solely for your enjoyment if you have the means isn’t what I mean by a doomed enterprise. In this blog post I’ll only be talking about investors who intend to make a profit with short-term rentals.)

Whether you're dreaming of a Swiss chalet, a Mediterranean villa, or a city apartment, here’s how to find, design, and optimize the perfect holiday rental investment—so you can make a profit while bringing joy to those who stay.

1. Where? Location, Regulations & Hidden Gems

Where is the spot you’re looking into?

The first question you should ask yourself is ‘where?’ because yes your location dictates profitability, but for a lot of different reasons.

•          Is it somewhere you’re emotionally attached to? I.e. You’re having the best vacation of your life right now and want to come back here endlessly while making a sound business investment.

•          Is it somewhere you’re coming back often for personal or business reasons and can perhaps manage yourself easily?

•          Is it a famous holiday spot (easy to get renters, but fierce competition and expensive real estate), or do you intend to make your real estate investment The Place To Be (more complex to attract renters, but little to no competition and cheap real estate). Your answer here will shape how you renovate and design the property to attract your clients.

•          and most importantly: have you checked local regulations regarding short term rentals? If you haven’t, some cities are 100% no go zones for such investments. A few examples of restrictions:

o          Barcelona: Bans short-term rentals in the city center without a license.

o          Paris: Requires registration and limits rentals to 120 days/year.

o          New York: Short-term rentals under 30 days are illegal unless the host is present.

o          Swiss Alps: Some villages (e.g., Wengen) restrict rentals to protect local housing.

2. Who? Define your niche

Who are the guests you want to attract?

Now you’ve decided on a location, who are going to be your clients? Just like when building a business, some market research is involved, because the people who are going to be interested in this location, are the ones you need to tailor your space to. For example:

Guest Type	Prefers	Willing to Pay For
Luxury Seekers	Design-forward or niche spaces, concierge services	High-end finishes, private pools
Families	Safe layouts, kid-friendly amenities	Multiple bedrooms, fenced gardens
Adventure Travelers	Gear storage, proximity to nature	Mudrooms, bike racks

While a chalet in the Alps attracts skiers in the winter and hikers in the summer, a Lisbon apartment lures digital nomads all year round. They have different needs and to attract them means tailoring your real-estate investment to what they’re looking for.

3. Why? Attract your holiday renters

Why would vacationers choose your home?

When you are yourself on holidays, ask yourself: What makes this stay exceptional? Why did you book this holiday home over dozens of others? The guest you’ve defined in the previous question should find all of their answers in your place. A couple of examples:

Seamless design for this ski gear walk-in closet by Workshop/APD

The Chalet

- Good: A Swiss chalet with a mountain view.

- Great: That same chalet in Switzerland with, plenty of closets for gear, a boot warmer, a warm and comfortable living-room facing the view, a kitchen adequate to cook for as many people as you can host, a fireplace, a curated guide to secret ski runs in the Swiss Alpine, local treats like some gruyère in the fridge.

- Unnecessary: a huge TV set (or several TVs), anything and everything connected (no the shower head does not need to be turned on via voice activation), high-end materials shipped from the other side of the world.

- Think: Warmth, Conviviality, Closet space.

The little house by the coast

This is a perfect example of great beach design by Lígia Casanova. There aren't any fishing or sea related artefacts, yet we know this is a coastal house. Do you know how this interior designer managed to do that?

This one will likely be in a favorite vacation spot, real estate pretty expensive and a lot of competition, so keep your renovation costs smart, efficient and think of the price-point your potential clients will look for.

- Good: A house walking distance to the beach

- Great: multiple well-designed bathrooms, hooks and railings to hang beach towels and bathing suits, closets for beach activity gear, outside amenities for shared meals (a pergola, an outside kitchen or at least a barbecue), a guide to your favorite coffees and restaurants (think more local information, less tourist, the locals can also then, in turn, recommend your accommodation).

- Unnecessary: overcrowded and outdated decoration (a beach design doesn’t need to have fish nets hanging on the walls), big and heavy furniture that will make the space look tiny and impractical.

- Think: Calm, Easy, Inside-outside

The rural mansion

The garden in this example is inherent to the house and a reason in itself to come.

Now this is the one that really needs to wow, because people will be coming to this location for your home specifically, rarely for the local tourism.

- Good: A house with a story to tell

- Great: Telling that story through every room of the building, renovating with local materials, uncovering every bit of history of the house writing notes to your guests so they can read more about it, keeping the quirks and the passage of time within the building, a library filled with books they can choose from and leave the ones they’ve finished reading, adding an herb garden and a gazebo or at least a little bench under a beautiful tree. Curating the exterior will be as important as renovating the interior here.

- Unnecessary: integrating modern designer pieces (no matter how expensive they may be) or simply trying to make the space look current with an open kitchen, or adding floor tiles. Keep the squeaky floorboards and chipped terracotta (natural) tiles.

- Think: Charm, Whimsical, Natural

Tip: you can read on here to learn more about adding charm and warmth without adding clutter.

The city flat

This is sadly an AI image (not prompted by me) but it serves the purpose of being bold and eye-catching, I would use this color palette in a city rental.

- Good: A flat in the heart of the city

- Great: an open space-optimized kitchen, a good coffee machine with pods provided, a good bed (that works for every rental and hotel!) in the calmest corner of the flat with good blackout blinds, good and flattering (!!!) lighting in the darkest spots i.e. a bathroom with no windows, a shoe-rack, enough space to open suitcases, a nicely positioned desk for the digital nomads, a guide to discovering the city by foot written by you.

- Unnecessary: a massive kitchen that takes up all the space, cluttering surfaces with decorative trinkets.

- Think: Personality, Openness, Practical

Tip: I wrote a whole blog post on designing a space meant for productivity if you want to lure in nomad workers right here.

I hope these few ideas give you a push in the right direction, but if you’re unsure of where to start, get in touch and let’s see how Stella Studio can help make your holiday rental investment the place your clients rave about to their friends and want to come back to.

4. What? Design your holiday rental investment's future

What exactly will make them come back (and rave about you)?

Repeat guests and referrals hinge on memorable touches, that includes optimized spaces, the right amount of storage and amenities, or on the contrary big open floor plans, and a little extra “je ne sais quoi”. As an interior design rule, we say that the shorter the stay, the bigger the personality. So if your city flat is attracting weekenders, then my advice to you is to go all out on bold colors and strong design choices. But if you’re leaning towards longer stays of 2-3 weeks in your beach cottage, then a simpler, more neutral tones will be a bit more appropriate. That being said, even 3 weeks is considered a short-term rental, so simpler décor yes, but still create a strong personality to attract guests via your online booking photos.

You want to know what I scour when I look at Airbnb or Booking photos to choose my next holiday rental? Here are my tips, as an interior designer, but just as someone who likes traveling and knows what to look for to make my stay enjoyable.

Outside spaces are as important as the inside for your holidayers. Curate them too.

1. Something memorable

I need a place to chill, share a glass of wine, or read a book everywhere I go, so I’m looking for at least one of these things:

• a balcony or terrace with a pretty view

• walkable access to the beach/river/lake

• a pool

• a comfortable living-room (for winter getaways) or outdoor dining (in the summer)

2. Bathrooms

This is probably where I’m going to be the pickiest. I have zero tolerance for poorly designed bathrooms, and they can ruin an experience for me. What to look for:

• enough hooks to hang towels

• adjustable shower-heads (how is that so hard to find?!)

• if the tub or shower has a shower-curtain, is it big enough?

• if the shower has doors, are they old plasticky crap (and leak), or do they look good?

• a spotto put my makeup bag near the sink

• and this one can be harder judging from photos but: does it look like there’s enough light? (again for makeup purposes)

Waking up to a view is the ultimate luxury to me

3. Bedroom(s)

Holidays are for resting, so the bedroom, or bed corner comes next on my list:

• What’s the bed like? Is it a double or 2 singles together? Does it look like it creaks or does it look comfortable?

• What are the beddings like? Again, 1 double sheet, or 2 singles? Old, new, looking like they were the tenants’ teenage son’s sheets?

• can it blackout city lights (if in a city) or does it have a nice view (if beach or country side)

• and something I can’t truly check but I take care of when I arrive: I plug out all electrical appliances that have an LED light, or cover them if I can’t unplug. The visual pollution of unwanted electric lights in a bedroom drives me crazy.

4. Food and Social spaces

Great example of a tiny space made cute and comfortable.

If my stay is over 2 days, then a kitchen is necessary, but I don’t want all the tools and appliances known to man, most of the time, a simple, space-planned kitchen is more than enough. I just want the basics:

• a fridge

• a large enough sink

• something to make coffee and tea (doesn’t have to be electric, an Italian moka, a French press and/or a stove kettle is more than enough)

• a dishwasher

• a large enough space to eat comfortably, and a large enough space to chill and foster good conversations (a living-room or outside space for summer destinations).

5. Other basic amenities

• enough space to have open suitcases in the bedroom (one for each guest obviously)

• a washing machine and drying rack (and space to open the drying rack inside as well as outside)

• soap, salt & pepper, olive oil, bottle-opener (having a bottle of wine as a gift is extra lovely)

These very old, mismatched tiles really make the space here, they tell the story and you don't have to worry about them being cracked or chipped.

 6. Things that really reel me in

I think I value authenticity above all, and I also think this is really where you can hit the spot for your future renters, so here are things I’ve found and still think about to this day.

•          The bed is facing a gorgeous view. Opening my eyes to the beach is ultimate luxury for me.

•          Good materials: wooden floor-boards, local marble or local terracotta tiles or local ceramic tiles or natural limewash or… I love a space that not only celebrates the local craftsmanship and natural resources, but also has a durable and warm aesthetic. As an investment, it makes absolute sense to look for strong and durable materials and builds so you don’t have to refurbish every couple of years. The cheaper the materials, the more work it will be for you (and in the end, a waste of money).

•          Notes or maps or anything promoting good local businesses. I have absolutely loved it anytime a host has recommended something. Sometimes it’s a local winery we should visit or a restaurant, once it was a coffee shop we had a little discount at (thus making me a regular client during our stay) and shout out to that same host who took the time to show us on the map which way we should be visiting Athens to avoid crowds, climbing uphill in the heat and being in “unsafe” spots after dark. That was just truly, truly amazing.

•          Books. As usual :)

Last Words

All in all, for me the secret to a good short-term rental investment, a place vacationers want to come back to, resides in three straightforward ideas:

• Good space-optimization and space-planning design tailored to their needs

• A thoughtful renovation with local (when possible), quality materials

• The extra touch that pulls at their heart-strings.

Do you agree or have more to add? Think about your last vacation home. What annoyed you? What delighted you? Let me know in the comments!

And if you’re planning to invest in a holiday home but are still in doubt about how to go about its renovation, get in touch and let’s work it out together. I space-plan and design homes in Geneva, Switzerland and also offer virtual consultations for projects across the globe.

Let's talk