Short term properties are usually known as vacation homes, and today we’re talking about the benefits and challenges of short term vs. long term rentals.
Lease Terms and LocationShort term rentals usually have a lease term of six months or less, while long term rentals will have lease periods that run from seven months to a year or longer. Short term rentals should always be close to attractions like theme parks. In central Florida, there’s Universal Studios and Disney. Most of the short term properties can be found in resort communities and are fully furnished. They also include all of the necessary housewares. With long term rentals, no furniture is needed because the tenants will want to bring their own. Those properties need to be clean and located in a safe area.
Property Management Education: Costs and IncomeIn any type of property, the owner will need to be prepared to pay the property taxes, insurance, HOA fees, and management fees associated with the rental property. Short term owners can usually claim higher tax deductibles, but long term owners are not subject to the tourist tax in Florida. Long term owners also don’t have to worry about utilities like electric, water, gas, television, and internet services. Short term owners will have to cover those expenses for their guests. There will also be booking fees and cleaning fees.
Short term property owners will enjoy higher rates per night, but this will be sporadic and based on seasons. There can be higher costs all around for short term owners, and paying your mortgage and other monthly expenses can become unpredictable. Long term properties bring more consistent cash flow because tenants are paying the same amount every month.
Short Term vs. Long Term Rental: Pros and ConsThere are pros and cons for both long term and short term rentals. For short term properties, the cons include the ongoing need for upgrades and marketing, as well as inconsistent cash flow. The pros, however, are less wear and tear and the availability of the property for personal use. Long term properties will not allow for personal use, but there is a more consistent cash flow, your renters will pay the utilities, and there’s no need to furnish the place.
If you have any questions about whether to have a short term vs. long term rental, please contact us at Rental and Realty Group, and we’d be happy to talk about your options.