Since the pandemic is under control now, people have started to move out of their houses. Because of this, private resorts and Airbnb rental houses are in high demand. Also, as hotels are getting expensive, tourists are preferring to stay in Airbnbs or rent homes for the short-term.
Short-Term vs. Long-Term Rental Real Estate
In a short-term rental, the leasing period is usually about a week to four weeks. Besides, this type of rental property is situated in tourist areas.
On the flip side, in long-term rentals, the leasing period can be more than a year. This type of rental property is usually in urban or suburban areas. If you want a stable rental income or cash flow, long-term rental property investments can be the go-to option for you.
4 Benefits of Investing in Short-Term Rental Real Estate
1. More Income & Steady Cashflow
Compared to long-term rental properties, you can generate more income and ensure a steady cashflow from short-term rental investments. However, for this, you will have to choose the right location.
If you purchase a rental property in a suburb or city center, you may not get enough short-term tenants. Because in these areas, people prefer to rent for the long-term. On the other hand, in tourist hotspots, people rent properties to spend their vacation, and usually, the duration of the vacation is a week to a month. So, while investing in a short-term rental property, always prioritize the tourist spots.
2. Maintain the Property as You See Fit
When you have a long-term tenant, you cannot do home upgrades whenever you like. You will have to inquire about the tenant’s availability. Also, sometimes the overall condition of the house will depend on the tenant. But in short-term rentals, it is the opposite. If you want to upgrade the kitchen, you can do it right now. Besides, as the tenants will be staying for a short period, you can clean the rental house more frequently. Moreover, as you will be looking after the rental property more closely, you can prevent serious damages.
3. Increase in Property Value Overtime
As long as you keep the rental property, the value of the house will increase every year. It means if you plan to sell the house after 5-10 years, you will have the opportunity to 2x your investment. And meanwhile, you will be earning rent from your rental property. It means your total rental investment will grow even more.
4. More Control in Rent Fees
When you have a long-term rental property, you can only increase the rent after the end of the leasing period. But in short-term rentals, there is no such issue. You can set the rental fees according to the market demand and modify them frequently. For example, if you have done some home upgrades, you can increase the per night rent from the same week. However, while setting the rental fees, ensure that the amount you are asking is justified.
