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With the rise of sites like AirBnb, HomeAway, and VRBO, short-term rentals are trendier than ever. You may be wondering if you should jump on the band-wagon and invest in short-term rentals. That’s why we have broken down some of the pros and cons for you to help you determine if this is a good investment strategy for you.
-Highly Lucrative: The earning potential for vacation rentals is significantly higher than long-term rentals. Think about it. If your long-term rent is $1,000 per month, that’s $12,000 of earnings per year. And if your short-term rent is $400 per night, that’s $12,000 per single month. That is 12x times the earnings!
-High demand and marketing potential: With the amount of vacation rental listing sites available, not only is easy to market your property, but also there is a high demand for vacation rentals.
-Less wear and tear: Short-term guests don’t typically move furniture in and out or decorate the property, which means less damage to the property over time.
-Regulations: Many cities and HOAs have regulations and even bans on short-term rentals. That’s why it is extremely important to check the regulations in your area before purchasing a vacation rental. Some cities, however, such as beach towns, are very supportive of short-term rentals. It’s always a good idea to confirm.
-Off-Season: Vacation rentals tend to be very seasonal. For example, summer is a great time to go to the beach, but November is not as big of a draw. Lodgify has great tips to increase off-season bookings.
- Management: When you have guests checking in and out every three days, your short-term rentals need cleaning every three days. You also must get new guests their keys and collect keys from departing guests. It can be a lot of work and particularly challenging if you live in another city. That’s why a good property management company can be a game-changer.
Another nuance to consider for short-term rentals is that vacation rentals have financing challenges. Luckily, Visio Lending has been able to make sense of the short-term rents and can help you grow your vacation rental portfolio. Ultimately, it is important to do your research and consult with your counsel to determine if short-term rentals are the right investment strategy for you.