Short Term Rentals Market Overview
Short-term rentals are fully furnished apartments that are available for a short period of time. They are also considered vacation rentals or an alternative to hotels. Over the past few years, short term rentals have grown in popularity to all landlords, investors, and renters as well. This popularity has increased the short term rental market to over $80 billion, and economic studies are showing that the industry is continuing to grow in the following years to come.
Speaking of which, what will be the landlords move if they are investing in their property as long term rentals? Well, that depends on how much they know about short term rentals because they are entirely different and have other factors that some landlords might not know.
Short Term Rentals or Serviced Accommodations
Well, both are related and almost the same. The difference here is that short term rentals are considered more as holiday lets, while serviced accommodations are more like hotel apartments with complete services and are more suitable if you need privacy and relaxation.
Serviced accommodations are apartments that come with all comfort required to feel at home. They are available for a stay for a short period of time, usually under 6 months, which is considered a short term rental.
Airbnb, for example, is a company that provides guests from all over the world with serviced accommodations to stay for a short period of time. At the same time, Airbnb allows homeowners and landlords to use their property as short term rentals, allowing them to have higher income potential on their property.
An important thing to mention, using Airbnb doesn’t require you to be a landlord or a homeowner; you can use Airbnb and act as a landlord and start generating income. Anyone can do that, use Airbnb to generate revenue. If you want to know how to use Airbnb to create passive income like me, have a look at my following courses
; while SA stands for Serviced Accommodations. In these 2 courses, you will be able to learn everything you need to know to start making real money on Airbnb, with no capital required to start. If you are already using Airbnb, the courses will also help expand your property portfolio.
Landlords Benefits on Short Term Rentals
I spoke earlier that many landlords are investing in their properties as long term rentals, which is a great fixed income that comes on a yearly basis that pays off mortgages and other bills. But the question is, have landlords considered to switch to short term rentals, and allow their property to be rented multiple times over the year, rather than sticking with 1 tenant? Well, some landlords did that and some did not.
Speaking of which, I will illustrate the benefits of turning your property into a short term rental.
1. High Income Potential
Turning your property into short term rental is definitely the best choice to make if you want to get more income on your property investments.
Earning a healthy rental income is the goal of any landlord, and short-term rentals can be lucrative. For instance, a mid-range rental can fetch $150 to $200 per night. Doing the math, in a month and per year is much more than having a rental income as a long term income.
At the same time, landlords should keep in mind potential expenses and maintain a budget. Such expenses can be cleaning the property after each guest, a slight repair if needed, and of course, doing the regular maintenance to keep the property tidy.
Some landlords would think this is tough work and should always be looking after the property, but they are not required to do that. There are property managers out there in the market that specialise in managing properties for the landlords and have an agreement on how to split the profits; it is a win-win situation.
Check out my company, Luke Capital Group, which offers unique and premium services for landlords to manage their property and allow them to have higher revenue on their property portfolio without even worrying about any single guest.
2. Always in-control
Landlords will have more control over their property if they invest in it as short term rental. They can continually monitor their property from the guests checking in and out.
Suppose there might be minor damage to the property, specific maintenance needed, or even a furniture repair or replacement. In that case, it can be solved out immediately. Therefore, the property will always stay clean, tidy, and well-maintained.
Unlike long term rentals, landlords have almost no idea what is happening during the tenants’ stay and what damages took place in the property. In most cases, landlords have to pay high expense bills to repair their property from long term tenants. That is why having short term guests can be more controllable.
Some landlords don’t have the time to do all of that, so they simply turn to property management companies that will manage all of the cleaning and maintenance of the property. Again, it is a win-win situation.
Landlords who invest in short term rentals have ultimate flexibility on their property. Suppose you needed the property for some personal use, an emergency or whatever the situation can be, your property will be there for you. You just have to block off the availability of your property and move in as much as you desire.
This is a significant advantage for many landlords.
This is not an option for long-term rentals, and you have to wait until the lease contract between you and your tenants expires and gives notice periods. After doing that, you need to make intense repairs and maintenance to your property to be ready for you.
Due to the nature of short-term rentals, landlords’ chances of dealing with unpaid rent and eviction are improbable. Generally, landlords use a property manager to advertise their listing, communicate with interested parties, and securely complete transactions. This makes the process efficient and mostly stress-free.
Smart landlords who deal with property managers are usually happier than landlords who do all the hassle themselves and landlords who deal with long-term rentals.
For that reason, having someone working on your behalf instead of you do all the work and handle all the stress. You will have more time to focus on other personal stuff of yours.
My company and team are experts in managing properties and allowing the landlords to have rental income on their property stress- and hassle-free.
Our services include some of the following:
Protecting The Landlord
Having Guest Standards
Setting Competitive Rates
Taking Great Photos
Making Maintenance a Priority
and much more services you can see on my company website, Luke Capital Group.
What Landlords Should Consider In Short Term Rentals
When landlords want to manage their properties and not deal with property managers, they should consider the following points.
- Principal and Mortgage Interest
- Landlord or Short-Term Rental Insurance
- Regular Cleaning Service
- Entertainment Subscriptions (Cable, Netflix, Hulu, Disney+)
- Furnishings throughout the unit
- Welcome Baskets
- Consumable Supplies (toilet paper, detergent, bath products)
- Landscaping Maintenance
- General Repairs and Emergency Fund
All these above points should be considered when investing in your property as short term rentals, especially when switching from long-term rental to short term rental as serviced accommodation.
Just so you’re aware, my company and team take care of all of these points when managing a property for landlords.
Contact Me For A Free Consultation
You can always contact me in case you have any questions. I would be happy to help you.
Check out my courses and mentorships on SHOP, if you want to change your life for the best, start or expand your property business.