Do you have an apartment you want to rent out? Of course, you want to make as much money as possible from rent. And although most people say renting long‑term is the best, there are advantages to short-term rentals, especially in popular spots. Read on to learn more!
Advantages of renting apartments long-term
Let’s look at the advantages of long‑term rent first. Such leases are six months at minimum and generally last for 12 months. There is a reason why it is a traditional and often a common choice.
Stability. Your rent will be coming in steadily for 12 months. No matter the high season or the low season, you will have a stable income. Tenants also usually pay utility bills, so one more worry off your shoulders.
Easy management. Although you might have to screen the tenants more thoroughly to find a good one, you will only have to do it once a year or even more rarely. You won’t have to advertise the apartment often too and constantly prepare for new guests. And you might not even need to furnish the place since long-term renters often bring their furniture.
What about short-term rentals?
Short-term rentals, often also called vacation rentals, rarely last longer than a month and might be just a few days. When it comes to apartment rentals, location is the most important factor. This factor also often influences the decision whether to rent short-term or long-term. Do you have an apartment in a warm, popular vacation area such as Hawaii islands or San Antonio and Tampa cities? Then a short-term rental is likely more profitable. Here are some of the advantages of short‑term rentals:
Higher-income potential. It’s simple: short-term rental prices are higher, especially in a popular spot. The management costs are also higher than with long-term rentals, but the profitability of a short-term rental apartment in a good location usually exceeds the costs by far. You can also adjust pricing way more easily. And you can benefit from some tax breaks and deductions for a short-term lease.
Flexibility. Would you like to use the property yourself sometimes? With short-term rentals, you have many different terms coming and going, and there is no rule that you cannot use the apartment for your own vacation between those periods. On the other hand, when renting the apartment long-term, you can’t just come for the weekend.
Management is getting easier. Before, renting for short periods was much like a second job because you had to do so much. But nowadays there are many platforms such as Airbnb, VRBO, or Xrental which do a lot for you.
However, if you are thinking about short-term rent, make sure it’s legal in your area. Some municipalities limit short-term rentals, so there is affordable housing for long-term residents. For example, the shortest rental period might be 30 days, or you might need to pay a fee. Penalties for not following rental rules can be very harsh.
So, is it better out your apartment to rent short-term?
It depends on you and your apartment for rent. Is it in a popular vacation spot, and are you prepared for lots of management or hiring a property manager? Are you prepared to renovate, furnish the apartment, and make the guests happy? Then short-term rental is the way to go. If you look for stability and easier management, a long-term rental might be better.
For some properties, hybrid rental works best. During the high season, you can rent the property for several days or weeks. And during the low season, rent it out long-term, such as for six months at a cheaper rate. This way can ensure high profits all year round.
Even if you only have a free room instead of a whole apartment, you can still rent it out! Such rentals are also popular with Airbnb. Not only do you earn some extra cash but you also get to spend time with people from other places, often other cultures.