If you’re thinking of buying real estate with the intention of renting out your new property, you might be weighing up the differences between long-term and short-term rentals. Below you will find some key points to consider when making your decision;
Benefits of Long-term Rentals
Here are some of the benefits of renting your real estate long term (this generally means in 6 month or one year contracts);
- Less work
- Stable income
Once you have an occupant in your property you can be pretty hands off. All you have to do is collect the rent and fix and problems. No regular check-ins and check outs, no constant emails and calls when advertising your property.
You will be able to plan ahead for your income on the period that you have an occupant; this is especially true when you negotiate that the whole year be paid upfront (which some people will do in return for a discount).
Disadvantages of Long-term Rentals
These are some of the disadvantages of renting out your properties long term;
- More wear and tear
- No chance to use your property
- Squatter’s rights
While long term renters will often look after the property and treat it and the furnishings with more respect, long-term use also means wear and tear. You may have to replace furnishings and fittings more regularly than if you rent in short spurts.
When you rent long term you cannot use the property when you wish to.
Long term renters may abuse their residential rights when their contract terminates, and it can be harder to get rid of them if they simply stop paying.
Benefits of short-term Rentals
Short term rent usually means renting by the day, week, or month. Here are some of the benefits of doing so;
- More money
- Can still use your property
- Cheaper furnishings
You could make a fair amount of money in a short time, especially if you rent your property by the day or week. For example, you might make the same money in two weeks when renting short term as you would in the whole month renting long term.
You can still use the property, and/or lend it to friends and family should you wish to do so.
Furnishing a property for short-term or vacation rental is cheaper and easier as there is less of a focus on everyday things like closet space. A big fridge and freezer, too, is less of a focus, and you won’t need a fancy stove or washing machine. The basics are enough for short-term vacationers.
Disadvantages of short-term Rentals
Here are some of the downsides to renting your home out short term;
- More work
- Less respect for your home
The money is better, but there’s more work involved too! You will need to manage check-ins and check-outs to ensure there are no clashes, and you will need to ensure that the property is in good condition for each guest.
If you don’t live nearby you may wish to hire a property manager.
Short-term renters tend to show less respect for your property and furnishings, and it’s much harder to track breakages and missing items when you rent to so many people in a month or year.
What do you think? What has been your experience when it comes to long- and short-term rentals? Leave us a comment.