Edinburgh Holiday Lets Net 14.9% After All Costs

The gross holiday let premium in Edinburgh sits at 162% for a 3-bed house, but after all operating costs the picture changes materially. This article breaks down the real after-cost numbers for both a 3-bed house and a 2-bed apartment, because the cost structures differ in important ways: apartments add service charges but enter the market at a much lower price.

The numbers below assume self-management for holiday lets (the dashboard default) and agent-managed buy-to-let (the UK norm at around 11% of rent). Edinburgh requires a short-term let licence under the 2022 Scotland-wide regime, with the city operating the strictest enforcement in the country: licensing costs and compliance burden are real, even though there is no nightly cap.

3-Bed House: 14.9% Net Holiday Let vs 4.9% Buy-to-Let

A 3-bed house in Edinburgh runs around £264,848, with median monthly rent of £1,850 and a holiday let nightly rate near £299. Here is the full annual cost stack for both strategies.

Airbnb Fees and Utilities Eat the Biggest Share of the Holiday Let Premium

Airbnb fees are the single largest deduction on the holiday let side, taking £9,018 at the 15.5% host-only rate. Other booking platforms charge differently: Vrbo sits closer to 5%, Booking.com around 15%, and direct bookings carry no platform fee at all. Most Edinburgh hosts use a mix, but Airbnb dominates the city-break market and the 15.5% figure is the realistic blended rate to plan around.

Utilities are the second meaningful gap. Holiday let utilities of £1,956 cover heating, electricity, water, and broadband for the host, since guests pay nothing on top of the nightly rate. Buy-to-let landlords pass these costs to tenants, so utilities largely disappear from the cost stack. Maintenance is also higher on the holiday let side at £4,755 versus £3,787, reflecting wear-and-tear from short stays plus a furnishing replacement allowance.

2-Bed Apartment: Lower Entry Price, Service Charges Bite Back

A 2-bed apartment in Edinburgh runs around £171,622, roughly a third less than a 3-bed house. Monthly rent of £1,313 and a holiday let nightly rate near £183 are correspondingly lower. The structural difference is the service charge, which applies to both strategies because it is a property-level cost, not a rental-strategy cost.

The service charge of £1,675 per year is non-negotiable and largely independent of how the property is used. In Edinburgh's older tenement stock this typically covers stair cleaning, common buildings insurance, and a sinking fund for roof and stonework repairs. New-build flats can run materially higher once concierge or lift maintenance is added.

House vs Apartment: The Net Yield Verdict

The 2-bed apartment wins on entry price (£171,622 vs £264,848) but the service charge of £1,675 per year is a fixed drag that houses do not carry. On a holiday let basis, the apartment lands at 13.4% net yield versus 14.9% for the 3-bed house. On a buy-to-let basis it is 4.7% versus 4.9%.

The trade-off is straightforward: apartments require less capital and tend to be easier to let to short-stay city-break visitors who want a central location, but the fixed service charge means the cost structure is less efficient at lower revenue. Houses carry no service charge but require roughly 50% more capital up front, and tend to suit longer family holidays in the south and west of the city. Edinburgh's central postcodes (EH1, EH3, EH8) skew heavily apartment, while the suburban belt around Portobello/Joppa (EH15) and Gilmerton/Moredun (EH17) is predominantly house stock.

Holiday Let Breaks Even at Just 22% Occupancy

The 3-bed house holiday let only needs 22% occupancy to gross-match the buy-to-let rent of £21,534. The current Edinburgh market median sits at 59%, well above that floor. This is the gross break-even, not the target: it tells you how far occupancy can fall before the holiday let strategy stops being worth the extra effort, not the level you should plan around. Most operators in Edinburgh budget for the median occupancy and treat anything above it as upside.

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Hiring a Letting Agent Drops Net Yield to 10.1%

The tables above assume self-management on the holiday let side, which is the realistic baseline for an investor who treats the property as an active business. For a 3-bed house, hiring a professional holiday let agent adds around £12,800 per year, equivalent to roughly 22% of gross revenue. That drops the holiday let net yield from 14.9% to 10.1%, with total costs rising to £31,433.

Whether that fee is worth paying depends on how much time you can give the property and whether you live in Edinburgh. Self-management means handling guest communication, cleaner scheduling, linen, restocking, and the occasional 11pm lockout call. Out-of-town owners almost always need an agent or a co-host arrangement: the alternative is a degraded guest experience that shows up in reviews and feeds back into lower occupancy.

FHL Abolition Changes the Tax Comparison

The Furnished Holiday Lettings tax regime was abolished from April 2025, removing the historical tax advantage that holiday lets enjoyed over standard buy-to-let. Mortgage interest is now deductible only as a basic-rate (20%) tax credit on both strategies, and capital allowances on furniture have been replaced with the less generous replacement-of-domestic-items relief. This makes the cost comparison in this article more important than ever: holiday let outperformance now has to come purely from gross revenue, not from a tax wrapper.

Stamp duty applies on purchase in Scotland, with an Additional Dwelling Supplement on second homes and investment properties. The exact amount depends on price band and personal circumstances, so check with your solicitor before committing. Edinburgh's short-term let licensing regime adds further compliance cost: licence fees, fire and gas safety certificates, and in some control areas a planning permission application for change of use. Short-term let licence required since October 2022 (Scotland-wide). Edinburgh has the strictest enforcement. New secondary letting (non-primary residence) may also need planning permission for change of use in certain control areas. No night cap per se, but licensing requirements add cost and compliance burden.

For comparison, Edinburgh's holiday let net yield of 14.9% sits well above the UK national median gross yield of 5.7%, even after all the operating costs in the tables above. A broader Scottish view is covered in Scotland Rental Investment Insights. For a Glasgow comparison, see City Centre (G2) Leads Glasgow at 12.2%, Doubling the National Median, which walks through the same cost breakdown for another UK city.

Data reflects market conditions as of April 2026. These are city-wide medians for Edinburgh; individual suburbs and specific buildings diverge significantly, particularly on service charges and apartment running costs. The dashboard shows suburb-level data for every bedroom count and property type, so you can model the cost stack for the exact area you are looking at. Explore Edinburgh rental data in the dashboard, or read more about our data sources and market score methodology.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.