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Over the past few years, there has been a lot of excitement about owning a short-term rental as part of an investment portfolio. This marks a dramatic change from the traditional long-term rental model.
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As more travelers utilize vacation rentals instead of hotel chains for their trips, you may be wondering if owning a short-term rental is right for you.
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Short-term rentals have caused a stir in many communities. Many full-time homeowners do not like having these properties in their neighborhood. Unruly vacationers often bring a party atmosphere to their quiet streets and some cities have banned them completely. In other areas, they are severely restricted in their use.
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Another consideration is the amount of time a short-term rental will take to manage. Unlike their long-term counterparts, short-term rentals often require more repairs and maintenance as the tenants do not treat these properties as their homes, as long-term tenants do.
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Short-term rentals also require someone to be available 24/7 to address any needs of the guests. Of course, you can hire a property management company to handle these issues, but that will cut into profits and average 20%-30% of rents.
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Short-term rentals can have a larger return on investment than long-term rentals, but they come with more work. They also have significantly higher vacancy rates, advertising costs, cleaning, and maintenance costs. On the other hand, having a vacation property you can enjoy yourself may tip the scale.
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There is no one-size-fits-all approach to real estate investing. Consider what works for you and make the best choice for your goals. Want to talk-it-out with a Professional? We’d love to help! Contact Us!
