If you own a rental property, you might wonder if putting it up for long-term tenants is better than finding short-term renters. The answer is not easy to find. It’s because the more you ask around, the more varied suggestions you get for both rental settings.
The fact of the matter is that both rental methods bring their pros and cons to the table. While long-term rentals carry a few advantages, short-term settings aren’t void of their own perks. This also holds true for the drawbacks of both practices.
To help you choose between these popular ways to generate rental income, here’s a lowdown on long-term rentals vs. short-term rentals.
Income Consistency
Similar to learning the differences between car rental options, the first thing that you need to determine is the income consistency for both long-term and short-term rentals. To summarize, long-term rentals offer monthly rental payments, while short-term rentals deliver daily or weekly options. With that, the tenants for long-term rentals stay at your property for longer as compared to short-term renters. This creates more income consistency for you if you go with long-term rental options.
Income Levels
The next factor in this comparison is the level of income that you can generate with both rental options. What short-term rentals lack in income consistency, they make up for in income level. This means that the per-day rent that you receive on short-term rentals remains higher than the daily rate for long-term rentals. In turn, you need to consider this distinction before you move forward with renting your property through either practice.
Tenant Reliability
With long-term tenants, you can easily check a rental history report to decide how reliable they might be in making consistent payments. But with short-term tenants, you mostly only have online ratings to go by on rental apps. Additionally, doing background checks on long-term tenants is easier than performing the same task for short-term renters. If tenant reliability is crucial for you, you may want to go for long-term renters for more peace of mind.
Flexibility in Upkeep
Whether you use a home services app or manage your property by yourself, you may find that long-term rentals give you more flexibility in upkeep as compared to short-term rentals. It’s because in long-term rental properties, you don’t have to do the daily cleaning and upkeep that is necessary in short-term rentals. However, you do need to make sure that your property is in a regular functional state for both types of tenants at all times.
Risk of Damage
Similar to why businesses need disaster recovery plans, you need to be ready for property damage as a landlord to protect your income stream. The risks of property damage are present with both long-term renters and short-term tenants, but you have more financial protection with long-term rental properties in the form of security deposits. While you may deduct damages from short-term renters’ cards on file after their departure, this can also create long dispute processes with the third-party rental apps that you use.
Possibility of Vacancy
No matter if you use a reliable vacation rental app to find short-term tenants, there’s always the chance that you may have vacant periods at your rental property. This is especially true for places that have seasonal tourism, where short-term rental income becomes less reliable when compared side-by-side with long-term rentals. In some cases, the higher per-day rate of short-term rentals isn’t enough to cover up the difference and might leave you scrambling for tenants.
Legal Protections
If you study the trends in car rental businesses, you may immediately spot the need for legal protections. This also applies to rental properties, where you need to protect your property and rights while handing it over to tenants. This is where long-term rentals can provide you with enhanced legal protections. Whereas, your protections vary for short-term rentals according to the rental app you use. You can get more information on this distinction with solutions like a professional inquiry platform.
After learning about these differences, you can make a confident choice between long-term tenants and short-term renters. This can help you get the most out of your property, according to your comfort.
