If you are thinking of purchasing real estate with the intention of renting your property, you might be weighing up the differences between long-term rentals and short-term rentals. Below you will find some key points to consider when making your decision.
Benefits of Long-term Rentals
Here are some of the benefits of renting your real estate long-term, which usually means renting in 6-month or yearly contracts:
Once your have found a renter for your property, you don’t have to do very much work in between except collect the rent. No regular check-ins and check-outs etc or answering call and emails when advertising your property for rent.
You have a clear idea of how much money you are going to receive in a given period. This is especially true if you negotiate that your renter pay the who year upfront (which some renters are willing to do for a discount).
Disadvantages of Long-term Rentals
Here are some of the disadvantages you might encounter when renting your real estate long-term.
More wear and tear
Despite the fact that long-term renters tend to look after your property better and treat your furniture with more respect, long-term use means that you might encounter more wear and tear as the property is used consistently rather in intense spurts.
No chance to use your property
There is no chance for you to use your property when it is rented all the time.
Your renters may abuse their rights as residents when their contract terminates. It is also harder for you to get them to leave if they stop paying their rent.
Benefits of short-term Rentals
Here are some of the benefits of renting your real estate short-term, which usually means renting by the day, week or month:
You can stand to make more money in a shorter amount of time, particularly if you are renting your real estate by the day or week. For example, you might make the same amount of money in two weeks that you would renting the whole month on a long-term contract.
Can still use your property
You can still use the property yourself if you have family or friends come to visit as you have more control over when people can or cannot stay in your property.
Furnishing your property for short-term rentals can be cheaper as there is less need for big items such as big refrigerators or gourmet stoves etc. Closet space is less important.
Disadvantages of short-term Rentals
Here are some of the disadvantages you might encounter when renting your real estate short-term.
While the money is better, you will be expected to manage your rentals, check-ins etc on a more frequent basis, which means more work for you. If you live locally, this might not be such a problem but it can be a disadvantage if you do not live nearby the property you wish to rent out.
Less respect for your home
Short-term rentals tend to show less respect for your property and do not take as good care of your furniture. It is also harder to keep track of breakages and missing items.