Short Term Vs. Long Term Rentals – Which One is More Profitable?

Are you planning on investing in rental properties for the first time? If so, you may be wondering if short-term or long-term rental properties are better.

In this article, we will answer this question and provide you with insight into which type of rental property you should invest in.

Understanding The Differences Between Short Term And Long-Term Rentals

Short Term Rentals – Over the last five years, the most popular short-term rental properties in the world have been Airbnb’s.

Although short term rentals have been very popular in recent years, more cities across the United States are starting to heavily regulate them.

Why?

Short term rentals have been cited as one reason for the reduction in rental inventory in cities like San Diego and Las Vegas. Plus, short term rental owners also pay less money in taxes compared to long term rental owners.

Short term rentals have been hit hard by the economic impacts of Covid-19. As the few remaining travelers seek out sterile environments, the appeal of staying in a short term rental has declined.

Will the short-term rental market return to where it was in 2019? Only time will tell. With a lack of a Covid-19 vaccine on the market, along with economic instability in the future, 2021 will likely be another difficult year for short term rental homes nationwide.

Long Term Rentals – In our opinion, long term rentals are a better investment property. They generate consistent income for the duration of the lease, are less time consuming to manage, the tenant pays for utilities, and there are fewer maintenance concerns due to wear and tear.

The United States is slowly transitioning into a nation of renters. This is a good reason to invest in long term rentals because people are always going to need a place to live. There’s nothing better for investors than to own an asset that’s always in demand.

Contact GoldenWest Management

At GoldenWest Management we specialize in full-service property management.

This means that we will save you the time, money, and hassle of managing your rental properties yourself.

Our property management team will assist you in advertising your property online, screening, and placing the most qualified tenants, maintenance, rent collection, customer service, and more!

To speak with us about the property management services that we can offer you, contact us today by calling (866) 545-5303 or click here to connect with us online.

Do Short Term Leases Help Or Hurt Landlords?

Short- and long-term leases both have different benefits and setbacks, before you begin any lease discussions with a prospective tenant you should research the pros and cons.

Although some landlords may be open to offering their tenants short-term leases, the reality is that most landlords don’t actually take the time to think about if that lease will potentially help or hurt them.

In this article, we will break down short-term leases and provide you with more information about if this popular lease term actually helps landlords or hurts them.

What Is a Short Term Lease?

A ѕhоrt-tеrm lеаѕе gеnеrаllу rеfеrѕ tо a lеаѕе wіth a duration of lеѕѕ thаn ѕіx mоnthѕ. Often, thеу are bаѕеd оn a mоnth-tо-mоnth rеntаl аgrееmеnts, whісh may оr mау not bе rеnеwеd аt the еnd of each mоnth.

Although mоnthlу аgrееmеntѕ аrе thе most соmmоn, thеу mау bе wееklу, оr еvеn lеѕѕ thаn оnе wееk in thе саѕе оf vacation rеntаlѕ.

Shоrt-tеrm lеаѕеѕ are mоrе соmmоn іn аrеаѕ wіth hіgh demand аnd lоw supply оf rental рrореrtу аѕ lаndlоrdѕ can аffоrd to be mоrе раrtісulаr аbоut who they сhооѕе as tеnаntѕ, аnd can rаіѕе the rent at thе еnd оf еасh ѕhоrt lеаѕе реrіоd.

Young couple moving in new place

Do Short Term Leases Hurt Owners?

Yes, it’s true that short-term leases do offer landlords some flexibility but the reality is that a short-term lease means that a landlord may have their property rented for 3-6 months at a time but it’s entirely possible that their rental property may not be rented for one month or more at a time because the success of these types of leases is all based on demand.

With a long-term lease, a landlord also benefits from the following:

  • Income stability
  • One consistent tenant for the next 12 months or longer
  • Most tenants who opt for long-term leases have higher standards for their rental properties than short-term
  • You can plan for the future with a long-term
  • Less turnover Maintenance Costs

Get Property Management Here

For property management in San Diego, Las Vegas or Arizona contact Goldenwest Management today by calling us at (866) 545-5303 or click here to connect with us online.

 

 

GoldenWest Management
Investment Property Solutions
CA LIC# 071791904