Short-Term vs Long-Term Rentals
The short-term property rental industry is exploding, leaving many homeowners and property managers perplexed why so many individuals are prepared to put up with the hassle.
Short-term rental is, without a question, a lot of effort. With new visitors arriving and departing regularly, a (hopefully) continual stream of queries to respond to, and frequent cleaning and preparation activities, long-term renting may seem to be a no-brainer.
In reality, all approaches have their own set of obstacles and benefits, which all property managers should know before determining which path is best for them.
As we’ve previously said, short-term rentals have a high turnover rate.
This entails screening visitors and accepting requests daily. It also means you’ll have less time and chance to get to know the folks you’re committing your property to, even if just for a short period.
Then there’s the logistics:
- Setting up essential meetings.
- Keeping track of contact information.
- Structuring your schedule to eliminate voids and duplicate bookings.
- Modifying your pricing points to maximize income.
Furthermore, renting short-term entails cleaning and maintaining the house between visits and frequently stocking up on supplies that visitors will expect to have access to during their stay.
All of this, of course, is contingent on you acquiring the visitors in the first place, which requires clever marketing and ongoing efforts.
Committing to a single tenant for a lengthy time may save much of the labor involved in hiring, impressing, and preparing for an ongoing stream of visitors. Still, it also means you may find yourself trapped in a binding contract when things aren’t going as planned. As a result, finding the perfect renters for your house may be time-consuming and exhausting. While temporary visitors may not always be friendly, short-term property rental operators may be certain their stay will be brief.
Another issue is that renting your houses long-term requires you and the homeowners you’ve recruited to relinquish a lot of authority over their property. Short-term rentals may be examined and accounted for between each visitor, but long-term rentals must be given over and entrusted to tenants for months, if not years at a time.
On the other hand, long-term renters expect to be afforded certain design liberties since they will be living in the property for a long time. When it comes to the aesthetic arrangements of their rentals, some proprietors like to have complete control.
Furthermore, whereas short-term rentals may often be booked by their owners for a one-time visit, enabling them to enjoy the lodgings when they choose and profit from them the rest of the year, long-term rental agreements do not.
Breaking the Tie
Naturally, every disadvantage of one choice is a benefit of the other.
When you rent long-term, the trouble of interacting with new visitors regularly is eliminated.
When you pick the short-term option, you won’t have to worry about turning up your properties and abandoning control for up to a year.
If it seems to be a toss-up that may go either way, depending on which obstacles the property manager finds the most difficult, it’s because we haven’t yet reached the tiebreaker.
When it comes to the final variable, the one that arguably bears the most weight for everyone in the business world — earning power, there is a significant difference between long and short-term leases.
The truth is that purchasing in bulk always saves money, and long-term rentals are the real estate market’s “wholesale.” It is permitted for vacation rental stays to be greatly inflated since they are short-term, one-time payments.
How Much Revenue Does Each Make?
According to The Telegraph, short-term rentals may make up to 30% more money than long-term leases.
However, the potential is considerably higher. According to reports, the same property that may bring in $1,000 per month when leased long-term can bring in up to $3,000 per month when rented out to a group of people in short bursts.
It’s right; you read that correctly. That’s more than a twofold increase in income. That’s a 24,000-dollar difference every year!
Yes, short-term property rentals need more regular engagement. Still, the additional earnings are well worth the work, particularly now that so many useful tools are available to automate your responsibilities and streamline the whole management process.
Participate in the Winning Team
There’s a reason why hundreds of thousands of individuals have placed their homes on popular short-term rental booking sites like Airbnb. Short-term renting gives you more freedom, flexibility, and, most importantly, more money.