Short Term Rentals vs Long Term Leases |
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Less Wear-and-Tear A lot of people are surprised when providers of furnished rentals say that their property is experiencing less wear and tear than when they had long-term tenants. While it may not seem obvious on the surface, there are three main reasons for this. The first is that people coming into the city for a short period of time don’t spend as much time sitting at home. They are usually either visiting on business (i.e. primarily at an office) or want to enjoy the town while they are here. This is in contrast to long-term tenants, who on average will spend much more time per day living in the place. The second reason is that after each stay, a professional cleaning team will work to make the home look and feel new for the next guest. The final reason is that usually there is a short gap period between guests, so an inspection of the property can be done to ensure it is 100% perfect for the next guest. With long-term tenants, maintenance issues can be neglected and build up over time, which ultimately causes more wear and tear.
Increased Income Perhaps the biggest surprise for first-time hosts is the increased income generated from their homes. It is not uncommon for furnished rentals to gross one and a half to two times the long-term rental. This is somewhat dependent on the property, if it’s an extremely luxury property this can be less, and in some cases (often condos) it can sometimes be even more than two times. The reason is that short-term rental prices are often competing with hotels who often charge between 200-800 a night. Unlike hotels, a short-term rental listing just needs to sell one unit. Therefore the pricing can be to market, compared to a hotel that often will sell half of its inventory at a big discount just to maintain a certain level of occupancy once the time comes. The market prices for short-term rentals are generally higher than comparable quality hotels. Travelers will pay more for space and extra amenities like a kitchen or laundry facilities. As a result, it can be a great investment assuming the quality of the short-term rental offering meets or exceeds the guest‘s expectations.
No More Nightmare Tenants Many long-time landlords can recount at least one story of a tenant’s experience gone bad. The problem with bad tenants is the process of evicting them can be even more of a hassle than dealing with the issues they present. In a furnished rental, even if you pre-screen a tenant and they turn out to be super picky once they arrive, you have the comfort of knowing it won’t be long before they are gone. You can never please everyone, but that peace of mind that you are not permanently attached to one tenant is something many owners value.
Perhaps the most underrated benefit of renting on the furnished executive market is the greater access you have to your own home. You can now check in on the property or have your contractor perform maintenance without giving tenants advanced notice. But even better, you can book your own home on any given weekend or longer. The feeling that the property is actually yours ends up often being the reason people like doing furnished rentals for years. With a long-term tenant, an owner loses connection with the property after some time and it becomes solely an investment vehicle and not as much of a place they have a lot of pride in.
Of course, not every property is good for furnished executive rentals and every city needs a healthy long-term rental market. However, for specific properties, locations, and owners, a long-term tenant just isn’t the right choice and once they try furnished rentals they never look back.
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