Skip to Content

When Is a Long Term Rental Better Than a Short Term Rental?

short term rentals by the waterAre you deciding between long term and short term rental strategies?

As a property investor, you want to get the best return on your investment. This is the goal that dictates all the other steps and decisions along the way. Often enough, deciding between the long term rental and short term rental strategies becomes a considerable stumbling block.

While the location is a crucial aspect of picking a rental property, you also have to think about your investment strategy. Some properties work better for long-term tenancies, others are great for short-term stays.

In the following paragraphs, we’ll cover the main pros and cons of both strategies. You’ll learn why some landlords prefer one over the other and get some food for thought before making your own strategic choices.

Advantages of Short-Term Rentals

Interior of luxury villaLet’s take a look at the top benefits of setting up a short-term rental strategy for your investment property.

Higher potential income

The nightly rates enjoyed by short-term rental providers can provide a significantly higher income compared to long-term rental properties. However, if your rental home is situated in a distinctly seasonal region, your losses during the low season are going to decrease the financial rewards.

Less wear and tear

Woman on vacation in short-term rentalSince short-term rentals often provide a home to stay in during weekend stays and shorter vacations, your property receives less wear and tear from daily life. Some rental owners feel that it takes much longer for the wear to build up.

Personal use

You can use the property for your own vacations. It’s easy to block off some dates in the calendar to enjoy some much-needed vacation time. You could save a considerable amount of money on accommodation that way.

Advantages of Long-Term Rentals

Detached villla resort with modern architectureNow we are going to move on with the advantages of basing your rental strategy on long-term tenancies instead of short stays.

Fewer advertising needs

You need to constantly ramp up your marketing efforts in order to keep your short-term rentals occupied. But when you have a long-term rental property, you just need to find that one quality tenant for your financial needs.

Free from utility payments

When you have a long-term tenant residing in your property, this person will pay for their water and electricity. This is a luxury that you can’t enjoy when you have guests staying for a week or two.

Improved cash flow stability

Long-term rentals allow you to enjoy a peace of mind because your year-long lease will provide a steady income. You don’t have to stress over unexpected seasonal changes or travel restrictions.

When Is Long Term Better Than a Short Term Rental?

outside-of-sunny-apartmentAs we have covered the advantages of both approaches, it’s time to answer the central question here. These are the most common scenarios where you’ll gain more benefits by opting for a long-term rental strategy:

You need a stable rental income

Whenever you need to have a stable passive income from your rental properties, it’s a good idea to opt for the long-term tenancy strategy. That’s because short-term rentals usually see wild fluctuations based on the ebbs and flows of seasonal interest.

Keep in mind that you could have a sustainable short-term rental income in some major cities across the U.S. However, as the recent times have shown, unexpected travel restrictions could affect short-term rentals even in year-round destinations.

You want more time for yourself

It’s no secret that even long-term rentals demand a considerable amount of time and attention. But short-term rental properties require even more of your time due to the constant turnover of renters.

At least when you have chosen the long-term way of moving forward with your investment, you won’t have to constantly think about cleaning, marketing, and getting ready to host your next guests.

No legal challenges

Time and time again, short-term rentals have raised some legal concerns and even court battles across the country. Some people and local governments demand more regulation in this growing industry.

Traditional long-term rental properties represent a more established sector of the rental housing market. There is less friction between the municipalities and Airbnb-style rental homes.

Long-term rentals and short-term rentals have their respective pros and cons. Pick a long-term rental strategy if you want to have more time to yourself and choose income stability over the prospect of higher earnings. For even more time to yourself, invest in hiring a property management company like RPM Limitless for your property.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details