During the past few years, short-term rental options are getting popular. As a Denham Springs rental property owner, you are probably weighing the option of buying or converting one of your properties to a short-term rental. One size does not fit all. Some short-term rentals are favorable to some but not to other investors. Before any decision is made, do your research on the pros and cons of owning a short-term rental property.
Probably the main advantage of short-term rental property is the higher income it generates. You can earn more in terms of dollars per day for short term rentals compared to a long term rental. If the turnover of tenants is fast, your property can earn more than a long-term lease. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
One more advantage that a short-term rental brings is flexibility. You have the option to rent your property for a week or for a month at a time. If your rental property is in a nice vacation spot, you can take advantage of a personal getaway whenever there are vacancies. Then there is the convenience of rental platforms like Airbnb and by using this service, you can say goodbye to leases if you list your property there. Should you decide to switch your property back to a long-term lease, just easily remove your listing from this site at any time.
On the other side of the fence, there are a few drawbacks to owning a short-term rental. Cash flow may be fast but its drawback is it has less stability. Most short-term rentals experience seasonal fluctuation so this could mean that your property wouldn’t be making money for a long time. While marketing and other smart plans can help generate revenue, always remember that dire situations can undermine our best efforts. Short-term rentals are very volatile to 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 disadvantage that you should remember about the short-term rental is the higher costs that it entails. Preparing a short-term rental could mean stocking up on essentials. Of course, you would want your property to be competitive so you need to invest in nice furnishings and décor. You also need to make sure that your tenants always have things like linens, toilet paper, pots and pans, and more. These items will need to be re-stocked between tenants, so this means more expense on your part.
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. Hiring someone could be a solution but you should also check your bottom line as expenses add up especially when your property is in high demand. As a cardinal rule, the place should be cleaned between tenants, and necessary maintenance and repairs are done on time. If you forget to do this, you could receive bad online reviews and it hurts financially to get fewer bookings as time goes by.
Finally, don’t forget to check state and local regulations on short-term rentals. Cities and homeowners’ associations have strict regulations for short-term rentals. Since restrictions are not the same from city to city or even between neighborhood to neighborhood, it is best to do your research first before deciding to convert your property into a short-term rental.
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