The main advantage of short-term rental property is its potential for generating a higher rental income. In terms of dollars per day, short term rentals are higher than long term rental. Your property can earn more each month compared to a long-term lease, for as long as it is always occupied. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
Another nice thing to have when owning a short-term rental is the flexibility it affords. 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, vacancies may not entirely be a bad thing as you can use it for your personal getaway. If you list your property on rental platforms like Airbnb, then you won’t have to deal with leases. You can easily convert your property back to long-term rental by just removing your listing from these platforms.
But there are a few drawbacks to owning a short-term rental. It may bring in cash fast, but it may not be that stable. Most short-term rentals experience seasonal fluctuation, so your property may not be earning for a time and that’s something you may not like. 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.
Another factor that you need to consider is that short-term rental equates to higher costs. Stocking on essentials is part of a short-term rental. Also, for your property to be competitive, you would need to buy attractive furnishings and décor. Your tenants should always have 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. When you’re doing the preparation for the next tenant by yourself, this would take up a lot of your time. 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 imperative that your place must be cleaned between tenants and maintenance and repairs are done at the right time. If not, then you could suffer from bad online reviews which would hurt your business because there would be fewer bookings in the future.
Finally, find out about state and local regulations on short-term rentals. Some cities and homeowners’ associations have strict regulations or are not allowing short-term rentals. Before you decide to buy or convert your property into a short-term rental, do your research first as restrictions vary from city to city.
If a longer-term Safety Harbor rental sounds more stable and profitable for you, contact Real Property Management TradeWinds. You can contact us online or call us at 727-400-4722.