Investing in real estate has been a popular choice because of the consistently good economic growth investors have received over the years. Now, there are more ways for you to gain returns when you invest your money in a property – you can either opt for short-term rentals or look at long terms rentals.
So, what exactly are short term or long term rentals? Well, we have seen the definition vary depending on whom you ask, but, to help you understand better, we’ll define short term rentals as properties that are typically rented for a few weeks and long term rentals are the ones that are usually rented for a few months.
Irrespective of whether you invest in short term or long term rentals, the goal remains the same – get the best possible return on your investment. Both these options have their own advantages and here’s quick rundown to help you get a better sense of what works best for you –
Advantages of long term rentals
Consistent income: Long term rentals have a year long lease that will ensure that you get a consistent rental income throughout the year. The seasonality factor is out of the equation when your tenants are living in your property.
Doesn’t require frequent advertising: As a homeowner, you don’t have to dedicate a lot of time managing your property or spend a lot of money advertising your property as frequently as you need to do with short term rentals.
No utility bills: In a long term rental setup, tenants are responsible for paying for the electricity, water, gas or other utility bills, but whereas in a short term rentals, you need to take care of these payments.
Basic maintenance: Your tenants take care of maintaining your property and they usually keep the house clean. There might be a few basic repairs that you need to take care of, but most of the responsibilities fall on the shoulders of tenants occupying your property.
Advantage of short term rentals
Higher potential income: The biggest advantage of a short term rental is it can help you make more money, especially if your property is located in a popular destination. The prices of your property can vary according to the demand, therefore you can maximise your overall income.
Not getting stuck with bad tenants: Sometimes, irrespective of properly screening your tenants, for various reasons, they might end up not being a good fit for you and your property. You can completely avoid this scenario with a short term rental.
Better maintenance: Short term rentals require you to clean your property between each guest turnover and this could actually help you spot any damages at the initial stage. You not only end up saving money by fixing a problem at an initial stage, but also helps you keeping your property well maintained.
Second home: So, you’re not only making money out of your rental property, but you also always have a place to go to whenever you feel like relaxing and rejuvenating. You can also host your friends and family every now and then, spend some quality time with them and have great fun.
If you’re wondering what’s the best option for you, just like with most investment decisions, there’s no perfect answer for this question. It depends on the convenience you’re looking for, risks that you can take, time that you can dedicate and returns you’re expecting.
Finally, if you’re thinking a short-term rental might be the right move for you, then we can help you manage it efficiently. At Belvilla, we’re working with short-term rentals owners for over 40 years now. With our expertise, we’ve helped homeowners across Europe to open their doors to millions of guests from across the globe. Just schedule a free consultation call with our rental experts to know more about short term renting and how we can help you.