Real estate is an attractive area of investment for investors. Investors have invested in hotels, rented out their homes to tenants for long and have had that as a source of income. After the pandemic, as people are becoming more concerned about safety, hygiene, and avoiding crowded places, a new property that is becoming increasingly popular is Short-term rental. Investors are becoming curious to learn about investing in short-term rentals. Hence here, we’ll break down the notable aspects of both for your better decision.
Short Term Rentals
– What is it?
The accommodations are booked for a short time, generally from one day to a month. They are called Vacation rental (if the occupant is staying for a vacation) or Corporate Housing (if the occupancy is for a business trip)
You are entitled to higher pay and profit. Guests choose to stay in this kind of accommodation for a short time. Say, if a guest has booked an apartment in Louisville, Kentucky, he will demand quality of service and not compromise on the price.
The wear and tear are less since the guests do not stay for a long time, and you have better control over the maintenance of your property before the next guest arrives. Such accommodations are also better maintained than others.
You are free to change the room rates as you please before the next guest arrives.
You have the freedom to enjoy your vacation rental by yourself when you please.
The guests will expect fully furnished properties. Therefore, you will have to save considerably for the maintenance, and rather you will have to invest for its over-maintenance.
There is competition, and you have to be on your toes listing your property, promoting it, seeing how other owners have priced their listings.
You will have to spend on the amenities – basic and added luxury amenities to have the edge over your competitors in attracting the guests.
You might have to be in touch with the guests over regular calls and messages.
You may have to keep your room rates, keeping in mind that you may not have occupancies during the offseason.
Long Term Rentals
– What is it?
Accommodations rented out to the same tenants over long periods ranging from months to years are called long-term rentals. These apartments for rent in Miami are considered long-term rentals. Consider taking a look at these if you are planning a long trip or move to Miami.
As long as tenants have occupied your room, the payment of the utility bills is their responsibility.
It is a source of a passive and steady income.
You may not have many guests as a turnover, but your expense will be comparatively lesser even if you hire a property manager on your behalf.
The revenue generated from a long-term apartment is comparatively lesser.
Since the guest is for the long-term, you will need to verify the guest’s background concerning legalities and other issues from his previous landlords.
You will have to check if there are legal rules in your area for renting the property for the long term.
You have less control over the property.
You may have to pay up high maintenance charges for permanent or long-term damage.
Each kind of accommodation has its own set of advantages and disadvantages. Do not get too bogged down by the thought of weaknesses. It’s a good thing that you have a property you can invest in. You can decide on your kind of investment depending on your type of person and what you like. For instance, if you are an active person and like meeting new people, a vacation rental can be your investment area. Sow the seeds of your investment wisely and reap the fruits on time.