Cutting holiday home costs:
8 fixed expenses you can lower
Most rental advice is about getting more bookings. Fair enough — but there is a second lever almost nobody pulls: your running costs. And that lever works more directly, because every euro saved is profit, with no extra guest required. Contracts also have a habit of quietly rolling on: the energy supplier you inherited when you bought the place, the insurance premium indexed every year, the maintenance contract nobody has looked at since. This article walks through them, including the Spanish specifics.
In this article
- Why saving beats renting out more
- Where does your money go?
- 1. Your energy contract (and contracted power)
- 2. Solar panels, energy label and IBI
- 3. Insurance
- 4. Pool, garden and cleaning
- 5. Internet, banking and subscriptions
- 6. Water, waste and municipal charges
- 7. The biggest expense: commission
- 8. Do not forget the deductions
- The annual check in one afternoon
- Frequently asked questions
Why saving beats renting out more
Short answer: a euro saved is a whole euro. A euro earned is not.
Say you want an extra €600 a year. Through additional lettings that means roughly one more booked week — and that week costs you cleaning, extra energy, linen, wear and tear, and if it comes through a platform, commission as well. Of that €600, perhaps €400 remains. Through your running costs, €600 is simply €600, every year, without anyone having to sleep in your house.
On top of that, fixed costs have the awkward habit of running on silently. Nobody emails to tell you your electricity rate has become uncompetitive, or that your insurance premium has been indexed for the fifth year running. With a holiday home that effect is stronger, because you do not live there: you see the bills arrive, but you never feel the difference day to day.
The point of this article: you do not need to do this every quarter. One fixed moment a year, outside the season, is enough. The rest of this piece is effectively that checklist.
Where does your money go?
The running costs of a typical holiday property on the Costa Blanca
| Expense | Indication per year | Room to save |
|---|---|---|
| Energy (standing charge + usage) | €600–1,400 | Large — supplier and contracted power |
| Insurance | €250–500 | Large — premium and cover |
| Community fees (comunidad) | €400–1,500 | Limited — only through the junta |
| IBI + waste (basura) | €300–800 | Limited — unless you qualify for a discount |
| Water | €150–400 | Moderate — mainly leaks and the garden |
| Pool and garden maintenance | €500–1,800 | Moderate — revisit the contract |
| Internet, TV, subscriptions | €300–600 | Moderate — often over-specified |
| Platform commission | €2,000–5,000 | Very large — see below |
Rough indications for 2026, based on a property with a pool and around 20 rented weeks; your own figures may differ considerably by municipality, property type and usage. Use them to see which expense weighs heaviest, not as a benchmark.
One thing stands out immediately: by far the heaviest expense is the one many owners do not think of as a running cost at all — the commission you hand over on every booking. We come back to that at the end. But even setting it aside, a typical property has somewhere between €500 and €1,000 a year to be found, without your guests noticing a thing.
Your energy contract (and contracted power)
This is almost always the quickest win, for a simple reason: when you buy a property you usually inherit the previous owner's contract. That is practical — the lights stay on — but it also means you are on a rate somebody else chose, possibly years ago, and which nobody has compared since.
There are two levers, and the second is nearly always overlooked:
Compare your current rate against what other suppliers offer. Switching is free, causes no interruption to your supply and is handled by the new supplier — you mainly need your CUPS number, printed on every bill. When comparing, check the contract term and whether the rate is fixed or tracks the market.
This is the maximum power your connection delivers, and you pay a fixed amount for it — including every month the property stands empty. Many holiday homes are set more generously than they need, sometimes dating back to construction. If your annual peak sits structurally below it, lowering it is a direct saving on your fixed costs.
One caveat on the contracted power: do not cut back to just above your measured peak. A full house in August with air conditioning, oven, dishwasher and kettle all running draws more than you and your partner do in spring. A tripped main switch during someone's holiday costs you an unhappy guest and possibly a review — which does not weigh up against saving a few tens of euros a year. So keep headroom, just not the double headroom that is probably there now.
Note: changing the contracted power is usually subject to restrictions — you cannot do it every month, and there are normally one-off administrative charges. So think it through before applying, and ask your supplier in advance about the exact conditions and costs in your situation.
Solar panels, energy label and IBI
A holiday home has a consumption profile that suits solar panels surprisingly well. The heaviest usage falls in summer, during the day: air conditioning running all afternoon, a pool pump putting in hours, fridges working against the heat. That is precisely when the panels generate most. In an ordinary home, where consumption peaks morning and evening, the match is far less favourable.
The decision comes down to three things:
- Your horizon. This is the key question. If you plan to keep the property and continue letting it for the coming years, an investment has time to pay for itself. If you are considering selling within a few years, it is a different conversation — although the installation does count towards the sale value.
- Your energy label. Solar panels generally improve the property's energy certificate. That is not only useful at resale; a better label is increasingly an argument for guests who care about sustainability.
- The IBI discount. Many Spanish municipalities grant a bonificación on IBI for properties with solar panels. It is not a national scheme, though: percentage, duration and conditions vary by municipality, and some offer nothing at all. You also have to apply yourself at the ayuntamiento, usually with the installation paperwork and often before a fixed date in the year.
That last one is exactly the sort of benefit people miss because nobody tells them about it. So call your municipality before the installation — or have your installer find out — so you know whether a discount is available, how much, and which documents to keep. Only count it towards your payback period once you have that confirmation.
Renting to guests who like the air conditioning at 19 degrees with the terrace door open? There is a second effect: with your own generation that hurts less. Many owners subsequently stop trying to police consumption altogether, which only improves the guest experience.
Insurance: review it every year
Insurance is the textbook example of a contract that runs on quietly. The premium is indexed annually, the policy renews automatically, and the cover has not been looked at since you took it out — usually in the rush around buying the property.
Two things to do, in this order:
- Check the cover first, the premium secondMany policies are written for own use or as a second home and do not cover damage during letting to third parties, or limit liability. Ask your insurer in writing whether holiday letting (alquiler turístico) is included. If it is not, that can almost always be arranged by amending the policy — and that amendment costs less than a single rejected claim.
- Then compare the premiumRequest quotes from two or three other providers on exactly the same cover, so you are comparing like with like. While you are at it, check the sums insured: is the contents value still realistic, or are you insuring the furnishings from before the refurbishment? Over- and under-insurance both cost money, just at different moments.
Also check whether you are running several policies with different providers — buildings here, contents there, liability somewhere else. Bundling often earns a discount and, more importantly, saves administrative grief at the moment you actually have to claim.
Pool, garden and cleaning
Maintenance contracts tend to be signed at purchase, with the first company the agent or the neighbours recommended, and never reviewed since. Three things worth checking:
- Frequency versus season. Are you paying year-round for weekly pool maintenance while the house stands empty from November to March? Many maintenance companies are happy to work with separate summer and winter rates — you just have to ask.
- Passing on cleaning. If you do not charge cleaning as a separate item to your guests, you are paying it out of your own margin. A fixed cleaning fee per booking is entirely standard and guests now expect it — this is a question of how you structure your pricing rather than of saving.
- Comparing rates. Request a quote from a second local company. Not necessarily to switch: often the conversation with your current provider is enough. In a market where many owners are absentee, rates sometimes creep up unchallenged for years.
Do be careful not to overshoot here. A half-maintained pool or an overgrown garden costs you reviews, and one mediocre rating in high season does more damage to your revenue than the maintenance contract ever did to your costs.
Internet, banking and subscriptions
The small items — but together they add up. And unlike the large ones, these usually cost you a single phone call each.
- Internet and TV. Guests want reliable wifi; that is a basic amenity now and not somewhere to economise. A costly TV package with hundreds of channels nobody watches is another matter. Most guests use their own streaming account on a smart TV, in which case a fast connection is worth more than a channel bundle.
- Bank charges. Spanish banks often charge non-residents higher monthly fees, and some charge fees that are waived if you meet certain conditions. Ask your bank explicitly which arrangement suits your situation best; that conversation pays off more often than you would expect.
- Software and tools. Channel managers, booking software, pricing tools: fine if you use them, a waste if you are paying because you once switched them on. Go through twelve months of statements looking for recurring charges.
- Alarm and monitoring. Contracts that renew automatically while the technology has become cheaper in the meantime. Worth a look.
Water, waste and municipal charges
There is little to negotiate on IBI and basura — those are municipal levies. But two things are worth the effort.
First: check that your bill is right. An unexplained high water bill is often the first and only sign of a leak in a holiday property — a running toilet valve or a garden pipe can go on for months without anyone noticing, precisely because nobody lives there. Once a year, put the meter readings of the past few years side by side. An increase that does not track your occupancy is a leak until proven otherwise.
Second: direct debit. Make sure IBI, waste collection and water run by domiciliación from your Spanish account. A missed municipal assessment attracts surcharges in Spain, and post sent to a foreign address does not always arrive. Some municipalities also give a small discount for direct debit — asking costs nothing.
Community fees (gastos de comunidad) belong in this list too. Individually there is nothing you can do about them, but they are set at the owners' meeting. If you never attend the junta, you are not voting on the budget you contribute to every year. Proxy voting is usually possible if you cannot be there.
The biggest expense: commission
Everything above might save a typical property €500 to €1,000 a year. Worth having, and it costs you one afternoon. But there is one expense that on its own is larger than all the others combined, and which rarely appears on the running costs list: the commission you hand over on every booking to the platform the guest came from.
On €20,000 of rental revenue at 15% commission, that is €3,000 a year. Every year. More than your entire electricity bill, insurance and pool maintenance put together — and it is the only item on your list that grows as you get better at this.
That does not mean you should abandon platforms. They bring reach, particularly when you are starting out. But it does mean every booking that reaches you directly rather than through a platform is money straight in your pocket — and that your own booking website pays for itself on one or two direct bookings a year. We worked the numbers through in an alternative to Airbnb.
Your own booking website, without commission
With Casa Hero you get a professional website with a calendar, enquiries and iCal synchronisation. A fixed monthly fee, no commission per booking — the better you rent out, the bigger the difference.
Do not forget the deductions
An expense you cannot lower can sometimes be partly recovered. For residents of the EU or EEA, costs connected to the letting are generally deductible in the Spanish return, in proportion to the number of days the property was actually rented out. That covers energy, water, insurance, IBI, community fees, maintenance and cleaning.
Which makes one practical habit important: keep everything, issued in the owner's name. Invoices in the name of the previous owner or of your property manager are awkward to use later. A simple folder per year — digital is fine — saves a great deal of searching at filing time and usually returns more than the effort it costs.
Keep track of your occupied days as well, since they determine what proportion of the costs you may claim. If you already record your bookings in a system, that figure falls out by itself. The rules, rates and forms are covered in detail in renting out a holiday home in Spain.
Tax rules change and your situation is rarely standard. Treat this as direction rather than advice: have your return checked by a gestor or tax adviser familiar with letting by non-residents.
The annual check in one afternoon
Pick one fixed moment a year, outside the season — January or February works well, because the annual statements have arrived and you still have time before summer. Then work through this list:
- EnergyCompare your rate with two other suppliers, and put your contracted power next to last year's highest peak.
- InsuranceFirst check that letting is covered, then compare the premium on identical cover.
- Meter readingsWater and electricity for the past three years side by side; investigate any rise that does not match your occupancy.
- Maintenance contractsAlign frequency with your season and request one comparative quote.
- SubscriptionsGo through twelve months of statements for recurring charges you no longer use.
- Archive invoicesEverything from last year in one folder, in the owner's name, ready for the tax return.
- Direct bookingsWork out what share of your revenue went on commission, and whether that can be different next year.
Two to three hours of work, and the result compounds every year. That is an hourly rate most extra rented weeks cannot match.
All about lowering your running costs
Yes. When you buy a property you usually take over the running contract, but you are not tied to it. Switching supplier is free, causes no interruption to your supply and is arranged by the new supplier. You will need your CUPS number (the unique supply point reference printed on every energy bill), usually an IBAN and a copy of your NIE or passport.
The potencia contratada is the maximum power your Spanish connection may draw, and you pay a fixed monthly amount for it — including every month the house sits empty. Many holiday properties are set generously, often unchanged since the building was completed. If your actual peak sits well below the contracted figure, lowering it is a straight saving on your fixed costs.
Check the consumption graph for the past year in your supplier or grid operator portal and find the highest peak. If it sits comfortably below your contracted figure, there is room. Do allow for a summer peak: air conditioning, oven, dishwasher and kettle running at once is normal in a full house. Cutting back to just above your measured peak invites a tripped main switch during someone's holiday.
It depends mainly on when you use electricity. A holiday home consumes most in summer, during the day, with air conditioning and a pool pump — exactly when the panels generate most. That is a better match than in many permanent homes. If the property sits largely empty outside the season, you mostly export in those months at a lower rate, which lengthens the payback period. The main question is whether you plan to keep and rent out the property for the coming years.
Many Spanish municipalities offer a bonificación on IBI for properties with solar panels, but this is not a national scheme: the percentage, duration and conditions differ per municipality and some offer nothing at all. You also have to apply for it yourself at the ayuntamiento, usually with the installation paperwork and often before a fixed date in the year. Check with your own municipality before counting the discount towards your payback calculation.
Not automatically. Many policies are written for own use or as a second home, and exclude damage during letting to third parties or limit liability cover. Ask your insurer in writing whether alquiler turístico or holiday letting is included. If it is not, that can almost always be arranged by amending the policy — for considerably less than the cost of a single rejected claim.
For residents of the EU or EEA, costs directly related to the letting are generally deductible in the Spanish return, in proportion to the number of days the property was actually rented out. That covers energy, water, insurance, IBI, community fees and cleaning. So keep every invoice, issued in the owner's name. The exact rules and rates are covered in our article on renting out in Spain; have your return checked by a gestor or tax adviser.
Start with the two largest and easiest: your energy contract (compare suppliers and check your contracted power) and your insurance (check the cover, then compare the premium). Together those usually account for the bulk of the saving and cost you a few phone calls. Subscriptions, maintenance contracts and bank charges can follow in your own time.