Short-term rentals have been getting popular recently. As a Mooresville rental property owner, you may have looked into buying or converting one of your properties into a short-term rental. Some are active proponents for short-term rentals, while other investors think it is not worth it. Don’t just jump into the short term bandwagon, do your work first and examine the pros and cons of owning a short-term rental property.
A short-term rental property typically commands a higher rental price so this is the main reason many property owners choose this method. Short term rentals trump long term rentals in terms of per day earnings. Your property can earn more each month compared to a long-term lease, for as long as it is always occupied. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
Another nice thing to have when owning a short-term rental is the flexibility it affords. It’s entirely up to you whether you want your property rented a week at a time or for several months. If your rental property is in a nice vacation spot, you can take advantage of vacancies and use it for your personal getaway. Then, do away with the hassle of leases by setting up your property on rental platforms like Airbnb. Switching your property back to a long-term lease can be done anytime by removing your listing from these sites.
But of course, there are a few drawbacks to owning a short-term rental. It’s true that it rakes in cash but this is not stable. Most short-term rentals experience seasonal fluctuation so this could mean that your property wouldn’t be making money for a long time. Marketing strategies can help but there are forces that can topple our best-laid plans. Short-term rentals are very dependent on economic conditions, and economic downturns often result in less demand. For example, you may have noticed that the short-term rental market has suffered a lot this year due to stay-at-home orders and travel restrictions caused by the pandemic.
Another factor that you need to consider is that short-term rental equates to higher costs. This means that you keep buying essentials as part of your short-term rental preparation. Furthermore, if you want your property to be competitive, you need to invest in furnishings and décor. Your tenants should always have things like linens, toilet paper, pots and pans, and more. These items need to be re-stocked in between tenants so that means your expenses will add up.
For a short-term rental, cleaning and maintenance is a must. Especially when you are doing all the work in preparing for the next tenant, this will consume a lot of your time. You could opt to hire someone but this would add up in expenses if your property is in high demand. It cannot be overemphasized how important it is to have the place cleaned in between tenants and that maintenance and repairs are done on time. Otherwise, you could get bad online reviews and thus suffer fewer bookings in the future.
Finally, find out about state and local regulations on short-term rentals. Some cities and homeowners’ associations have strict regulations or are not allowing short-term rentals. Just because a restriction is true in one neighborhood does not mean it is also true in another. So do your research first before converting your property into a short-term rental.
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