Short-Term Rental of Properties in Varna – a (Non-)Profitable Investment

Abstract

In this article, the market for investment residential properties in the city of Varna intended for short-term rental (overnight stays) is examined, and it is analysed whether this type of investment can be considered profitable. The main factors shaping demand and supply are presented – tourist flows, seasonality, competitive environment, regulatory framework and the development of online platforms for shared accommodation. Based on data from AirDNA, Airbtics, Booking.com, the Register of accommodation facilities of Varna Municipality and information from specialised property management companies, an analysis is carried out of the number of accommodation units, price levels and the annual cash flow from short-term rentals. The key advantages of short-term rentals are examined – higher potential income per night, managerial flexibility and the possibility for personal use of the property – as well as the main disadvantages, such as pronounced seasonality in Varna, high operational engagement and maintenance costs, increasing competition and regulatory uncertainty. Through a comparative analysis between Varna and Sofia, different risk and return profiles are outlined – a seasonal seaside market versus a more stable year-round business and tourist market. Recommendations are presented to investors, property managers and local authorities with a view to enhancing the transparency and sustainability of this segment of the real estate market.