Long-Term vs. Short-Term Leases: The Advantages and Disadvantages
The Advantages of Short-Term Rentals
Profitability – According to current data, short-term rentals may make homeowners 60% more revenue than long-term rentals. A home that makes €1,000 as a long-term lease may earn three times that amount as a short-term let, according to our estimates. Simply look at the nightly pricing on platforms such as Airbnb and you will realize how much money can be made.
Making things interesting — If you're a people person who likes meeting travelers from all over the world, you're more likely to notice the advantages of renting out your house as a short-term rental. It will enable you to meet a variety of intriguing visitors and share experiences with them that will definitely enrich your life.
Flexibility — The advantage of short-term rentals is that you, as the property owner, have complete discretion over when and for how long you rent out your space. If your circumstance changes, you may remove the listing or move into the house yourself. If you wish to utilize your Airbnb for a family vacation this summer, you may schedule those dates in your calendar. This kind of adaptability is not achievable if you rent it out on a long-term basis.
The disadvantages of short-term rentals
Being available – If you rent out your home as a short-term rental, you must be ready to meet visitors and react to their messages 24 hours a day, seven days a week. Listing your vacation on websites like Airbnb means receiving a lot of emails and inquiries from visitors – and failing to respond quickly might harm your ratings and exposure on the site.
Cleaning on a regular basis — Having new visitors arrive each week necessitates a lot of dusting, vacuuming, and cleaning. Towels and bed linen will also need to be washed on a regular basis. If you don't love home duties, you might employ specialists to handle this aspect of the business, but make sure to establish an acceptable cleaning price to cover your expenditures.
More Marketing - Because of the high turnover of visitors, short-term rentals must be offered to new audiences. To help visitors discover you, you'll need to concentrate on keeping your listing available on sites like Vrbo, Booking.com and Airbnb, as well as using other internet marketing and social networking tools.
The Advantages of Long-Term Rentals
Mindfulness – When you have long-term tenants, you don't have to constantly promote your home. You may rest easy knowing that the property will be occupied for a lengthy amount of time every night. You, as the property owner, will have to put in far less work than if it were classified as a short-term rental.
Guaranteed revenue — While nightly prices are higher than long-term rates, there is no assurance that you will maximize your occupancy rates as a short-let. You have a guaranteed revenue that is locked in for the life of the rental agreement if you have long-term renters in the space.
Caring Tenants – Long-term tenants are far more committed in the upkeep of your property. They are aware that they would be living there for at least six months and, in most situations, will want to do all possible to ensure that the property is kept in good condition.
The disadvantages of long-term rentals
Settled – Life, as we all know, can be unpredictable. When faced with shifting circumstances, being bound into a 12-month lease with a renter is not always desirable. Long-term rentals do not enable you to alter your mind regarding occupancy or invite guests to stay in your property during the holidays.
Giving up control — When you rent out your home on a short-term basis, you have the authority to enter the property after visitors have left and do anything you want in terms of maintenance and cleaning. When you have long-term tenants, you relinquish control and are at the hands of those renters in terms of how your apartment is cared for.