The idea of short-term rentals has risen in popularity during these past few years. As a Spring rental property owner, it may have crossed your mind to buy or to convert one of your properties to a short-term rental. Short-term rentals may work perfectly for some, but for some investors, it is too much work. Before any decision is made, do your research on the pros and cons of owning a short-term rental property.
Probably the main advantage of short-term rental property is the higher income it generates. Short term rentals gain more money on a daily basis compared to long term rentals. Your property can earn more than a long-term lease, just as long as tenants are lining up. Short-term rentals let you increase prices during times of high demand, allowing you to maximize your profits.
With a short-term rental property comes great flexibility! Whatever suits you, you can choose to rent your property for a week or a month at a time. If your rental property is in a nice vacation spot, you can take advantage of a personal getaway whenever there are vacancies. If you list your property on rental platforms like Airbnb, then you won’t have to deal with leases. Should you decide to switch your property back to a long-term lease, just easily remove your listing from this site at any time.
But there are a few drawbacks to owning a short-term rental. Cash flow may be fast but its drawback is it has less stability. Most short-term rentals experience seasonal fluctuation and this means that your property could be sitting empty for a long time. Marketing may help weather the storm but remember that there are storms that are way too strong. Short-term rentals are very sensitive to economic conditions, and economic downturns often result in less demand. For example, you may have noticed that the short-term rental market has suffered a lot this year due to stay-at-home orders and travel restrictions caused by the pandemic.
One more disadvantage of short-term rentals is the higher costs that come with them. Stocking up on essentials is part of a short-term rental. Of course, you would want your property to be competitive so you need to invest in nice furnishings and décor. You also need to provide your tenants with things like linens, toilet paper, pots and pans, and more. These items will need to be re-stocked between tenants which over time translates to higher expenses.
For a short-term rental, there will be more cleaning and maintenance required. Plus, if you’re doing all the preparations for your next tenant, this will require a lot of your time and effort. You could hire someone to do it for you but it would prove to be expensive especially if your property is in high demand. It is extremely important that the place should be cleaned between tenants and maintenance and that repairs are done on time. Because if you don’t, you could get bad online reviews. This is a thing we desperately want to avoid as it results in fewer bookings in the future.
Finally, don’t forget to check state and local regulations on short-term rentals. Some cities and homeowners’ associations have different regulations for short-term rentals. Also, restrictions vary greatly from city to city or place to place so do your research first before converting your property into a short-term rental.
If a longer-term Spring rental sounds more stable and profitable for you, contact Real Property Management Republic. You can contact us online or call us at 281-362-5001.
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