As a result of the short-term rental industry booming, many homeowners and landlords are finding themselves scratching their heads, wondering what is making so many people so willing to deal with this industry.
It’s no secret that short-term rentals are difficult. The constant flow of new guests, the (hopefully) constant stream of inquiries, and regular cleaning and preparation tasks may make it appear like the much more hands-off choice of long-term renting is the best option.
It is important, however, for property managers to be aware that both options have unique challenges and rewards.
Short-Term Rentals: A Revolving Door
There is a lot of turnover with short-term rentals, as we have already mentioned briefly.
As often as every few days, you will have to screen guests and approve requests. This also means that you have less time and opportunity to get to know the people you are entrusting with your property, even if it is for a short period of time.
On the other hand, there’s the logistical side of things – organizing key exchanges, keeping track of customer details, scheduling your calendar to avoid vacancies and double bookings, and adjusting your price points to maximize revenue.
You will also be responsible for cleaning and maintaining the home between guests as well as regularly stocking up on essentials that guests expect to have access to during their stay if you rent short-term.
You will need a strategic marketing plan and constant efforts to ensure you secure the guests in the first place.
Leasing is like being chained to a ball and chain
You might not have to recruit, impress, and prepare for an endless parade of travelers if you commit to one tenant for an extended period, but you can find yourself trapped in a binding contract if things don’t go as planned. For this reason, the process of finding the right tenants for your home is often long and draining.
Even if temporary visitors are not always courteous, (which most tend to be) short-term rental managers can breathe easily because they know their stay will be brief.
Second, you and homeowners who hire you to manage their rental properties must give up a lot of control over their property when renting long-term. When renting a short-term rental, guests can take a look around and count on the rental, but when renting a long-term rental, tenants are handing over their property for months or even years at a time.
Generally, long-term tenants expect to be able to have some freedom in designing the property since they will be living there for quite a while. When it comes to decorating their rental, some homeowners prefer to make all the decisions.
Furthermore, while short-term rentals can often be reserved by their owners for short trips, allowing them to use the accommodations over the course of the year and earn a
profit, long-term rentals do not offer the same luxury.
Every negative aspect of one option is also a positive aspect of another.
Renting long-term eliminates the hassle of communicating regularly with new guests.
When you choose to go the short-term route, you don’t have to worry about handing over your properties and relinquishing control over them for as long as a year.
We still haven’t gotten to the tiebreaker, and so it seems like a toss-up that can go either way based on which challenges the property manager finds more demanding.
There is a notable discrepancy between long and short-term rentals when it comes to the ultimate variable, the one that likely holds the most weight for anyone in the business world – earning power.
There are always savings when buying in bulk, and long-term rentals are essentially the wholesale market for real estate. It is acceptable for vacation rental stays to be marked up significantly, given that they are short-term and one-time expenses.
The Telegraph reports that short-term rentals can bring in up to 30% more profit than long-term rentals.
However, the potential is far greater than that. The same property that brings in $1,000 dollars a month when rented long-term can rake in as much as $3,000 dollars when rented out to guests on a short-term basis.
Yes, you read that correctly. Revenue is more than doubled. It’s a 24,000-dollar increase!
Even though short-term rentals require more frequent involvement, the extra profit is worth it, especially with all of the useful tools available to automate your tasks and make the entire management process easier.
Join The Winning Team
There’s a reason why millions of people have listed their properties on sites like Airbnb, a popular short-term rental platform. Short-term rental offers freedom, flexibility, and the clincher: greater rewards. At Lodgable we offer all the tools that are necessary to make your vacation short term rental business successful, all at no cost to you!