Explore comparing short-term vs. long-term rentals to determine which option suits your needs and preferences. It is no secret that furnished short-term rentals have gained popularity in recent years. The resurgence of post-pandemic corporate activities and the widespread “work from anywhere” movement has increased demand for such accommodations. Although many real estate professionals have yet to adapt to this trend, it presents a lucrative opportunity for forward-thinking individuals. Like any other consumer-focused product or service, quality offerings attract higher prices, enhancing a property’s cash flow. Furnished rentals offer several advantages over traditional yearly leases, such as reduced wear and tear, increased income, freedom from problematic tenants, and improved property access.
Reduced Wear and Tear
Many property owners find that their furnished rentals experience less wear and tear compared to those with long-term tenants. Though it may take time, there are three primary reasons for this. First, short-term visitors often spend less time in the rental, either in town for business or eager to explore their surroundings. In contrast, long-term tenants typically spend more time living in the property. Second, professional cleaning services ensure the home appears fresh and well-maintained for each new guest. Lastly, the brief vacancy between guests allows for thorough inspections and maintenance, preventing the accumulation of issues that cause wear and tear over time.
New hosts are often pleasantly surprised by the increased revenue from their furnished rentals. It is common for short-term rental income to be 1.5 to 2 times that of long-term leases, depending on the property’s luxury level and type. Short-term rental rates often compete with hotel prices ranging from $200 to $800 per night. However, unlike hotels that need to maintain a certain occupancy level, short-term rental hosts focus on marketing a single unit. Consequently, the market prices for short-term rentals are generally higher than those for comparable hotel accommodations. Travelers are willing to pay a premium for additional space and amenities, such as kitchens or laundry facilities, making furnished rentals attractive if they meet or exceed guests’ expectations.
Elimination of Problematic Tenants
Many experienced landlords can recall at least one instance of dealing with a difficult tenant. Evicting such individuals can be even more challenging than addressing the problems they create. In the case of furnished rentals, even if a pre-screened tenant turns out to be demanding, the temporary nature of their stay offers some relief. While it is impossible to please everyone, the knowledge that a problematic tenant’s stay is short-lived provides peace of mind to property owners.
Increased Property Access
One often overlooked benefit of furnished short-term rentals is the enhanced property owners’ access to their homes. They can inspect the property or schedule maintenance without providing advance notice to tenants. Additionally, they can reserve their property for personal use whenever desired. This sense of ownership often encourages individuals to continue offering furnished rentals. In contrast, with long-term tenants, property owners may lose their connection to the property, which then becomes merely an investment vehicle.
While only some properties are suitable for furnished short-term rentals, and a thriving long-term rental market is essential for any city, specific properties, locations, and owners may find long-term tenants unsuitable. Once they experience the advantages of furnished rentals, many never look back.