5 Costly Mistakes Vacation Rental Owners Make

Renting out your vacation home in the Canary Islands can be one of the best investments you make—but only if done right. Many property owners jump into short-term rentals excited by the idea of passive income and high demand from tourists, but they quickly find themselves overwhelmed, misinformed or even facing serious legal issues.

At Pambnb, we’ve helped countless owners recover from bad setups, regulatory fines, and guest complaints. So today, we’re sharing the most common mistakes we see—and exactly how to avoid them.

❌ Mistake #1: Renting Without a Tourist License

This is by far the most serious and the most common mistake. Many owners start renting out their properties on platforms like Airbnb and Booking.com without realizing that, in the Canary Islands, a tourist license is legally required. Without it, you risk fines that can reach up to €125,000.

Why it happens:

• Owners are unaware of local regulations.
• They assume listing on Airbnb makes them "legal."
• They underestimate the consequences of non-compliance.

How to avoid it:

• Work with a management agency like Pambnb that will handle the entire licensing process for you—from the Prior Consultation with the Town Hall to submitting the Responsible Declaration.
• Make sure your property meets the equipment requirements outlined in Decree 113/2015.

If you want to read more about you have in this article all the risks – right here understand the risks of renting your property without a license.

❌ Mistake #2: Not Understanding IGIC and Tax Responsibilities

Spain has a complex tax system—and the Canary Islands have their own version of VAT: IGIC (7%). In addition, rental income is subject to IRPF (Personal Income Tax) and registration under IAE 685.

Why it matters:

• If you're a non-resident, your income may be taxed at 19% or 24%, depending on your country of residence.
• You may be eligible for REPEP (a simplified tax regime for small landlords), but only if your earnings are under €30,000.

How to avoid it:

• Consult a local tax expert or let Pambnb manage your legal and tax compliance. We will help you right now – contact us here.
• Track all income and deductible expenses correctly.
• Stay informed about declaration deadlines.

❌ Mistake #3: Poor Property Preparation

Think that simply furnishing your apartment and uploading a few photos is enough? Think again. In a competitive market like Tenerife, guests expect high standards.

A poorly prepared property can result in negative reviews, reduced bookings, and ultimately lost revenue. First impressions matter—and guests often decide whether to book based on your photos and listing quality alone. Once they arrive, the experience must meet or exceed expectations.

What gets overlooked:

• Missing required equipment
• Poor-quality or dark photos
• Outdated or mismatched furniture
• Unclear guest instructions

How to avoid it:

• Use a professional photographer (included in Pambnb’s full management service)
• Follow the official checklist of required items in Decree 113/2015
• Go beyond the basics to create a memorable guest experience

❌ Mistake #4: Doing It All Yourself

Managing a rental sounds easy… until it isn’t.

What starts as a simple side project can quickly spiral into a full-time job. Between coordinating last-minute cleanings, responding to guest messages at all hours, handling double bookings or cancellations, adjusting pricing to stay competitive, dealing with maintenance emergencies, and keeping up with legal filings, the pressure can become overwhelming.

Every task requires attention to detail, fast reaction times, and a deep understanding of guest expectations and market trends. And when you're managing from a distance or juggling another job, the stress can double.

The reality:

• It’s a full-time job if done right
• Mistakes cost money (and reviews)
• Guest expectations are higher than ever

How to avoid it:

• Delegate the day-to-day to a professional management agency like Pambnb
• Focus on strategy, not operations
• Benefit from our tech tools, dynamic pricing, and local support

Many owners burn out trying to do it all alone, often realizing too late that they’ve traded financial freedom for constant anxiety.

❌ Mistake #5: Failing to Optimize Listings

Listing your property is just the beginning. The difference between a booked calendar and an empty one often lies in the details of your listing.

Where owners fall short:

• Uncompetitive pricing
• Incomplete or unclear descriptions
• No calendar sync across platforms
• Slow response times

How to avoid it:

• Let Pambnb handle your listing optimization: titles, photos, pricing, and guest communication
• Use tools like dynamic pricing and automated responses

Owning a vacation rental in the Canary Islands is a great opportunity — but only when managed strategically. These common mistakes are easy to fall into, but with the right partner, they’re also easy to avoid.

At Pambnb, we offer all-inclusive property management to help you:

• Stay legal and compliant
• Maximize revenue
• Protect your time and peace of mind

📧 Contact us at info@pambnb.com or by tapping on contact and let’s make your rental property a real success story.