Long-Term Rentals vs. Short-Term: Settling the Debate
In a post-Airbnb world, everyone and their cousin thinks managing rental properties is an easy way to make money. People often gloss over how much time and effort it actually takes to plan their real estate investments.
What’s the big deal, right? You buy a couple of condos and turn them into lucrative rental properties. Grand opening, grand closing. Well, the reality is a little more complicated. There are several things you have to consider as a landlord. One of the most critical of those things is the amount of time you want your tenants to be living in your rental properties.
This is where short-term rentals and long-term rentals come into play. As a landlord, you’re always looking for the best return on investment. To get that, you have to decide on which rental property time frame is better suited to your needs. To help make your decision a little easier, we’re going to take a look at some of the benefits and shortcomings of each strategy. Hopefully, it’ll make your life as a landlord a little easier.
For landlords who’ve never managed any rental properties before, starting small is always a good idea. Short-term rentals are a great way to dip your foot in to test the waters. Since there are so many variables to consider as a landlord, don’t overcommit and sign up for something that may not be right for you on a long-term basis.
You also have short-term tenants to consider. While it’s nice to have a steady stream of money coming in through different tenants — you’re also rolling the dice every time. Short-term rentals may generally charge more per night or week, but people also treat it as such. They’ll never really look at it as their home and, as a result, will be less likely to take care of it as much as long-term tenants.
With a revolving door of tenants, it’s also not always easy to keep up, either. Different people have different needs — obviously. Your version of maintenance may not be the same as someone else. That said, short-term rentals are still a good option for people who are looking to make some quick cash without renting their space out at all the time.
Stability is vital when it comes to long-term tenants. You know they’ll be there for a longer period, and you won’t have to worry about renting your space out every few days or weeks. You’re also getting to know your long-term tenants better than you would a short-term tenant. There are background and reference checks that you can also do to make sure the tenant is suitable. Short-term rentals don’t give you the same luxury of time in that regard.
There’s also a steadier cash flow that you receive every month. You’re not going through long periods with a vacant property. While it’s generally true that short-term tenants pay more, the time they spend in your rental property is much shorter. In the long run, you’re not necessarily going to amass a lot more cash on short-term rentals.
Having long-term tenants is also generally less stressful. Like we mentioned earlier, you’re getting to know who lives in your rental property. The more time they spend in that space, the more it’ll feel like home to them. That can save you a lot of headaches, too. Think how much more stressful it is dealing with vacation rentals or people who want to rent your place for an extended party. At the end of the day, it depends on your personal preference, temperament, and how comfortable you are with searching for tenants to fill your space.