Reasons Why People May Seek Short-term and Long-term Rentals Now Unveiled
When it comes to rentals, different kinds of people seek accommodation for a variety of reasons. Whether it is a professional movie crew looking to rent a space, a tourist looking for somewhere to stay on holiday or tenants looking for a one-year lease – there are a range of reasons why people may seek short-term and long-term rentals.
When a property is rented for a period of 24 hours or up to one month, it falls under the short-term rental period, whereas, if a property is rented for over one month it by and large falls under the long-term rental category.
Recently, there has been a surge in online vacation rental marketplaces, no wonder many people are interested in listing their properties on websites like Bayut- an online marketplace that offers investors varieties of properties to invest in. Whether renting for short-term or long-term, there is something for everyone. With the use of such platforms, investors, property owners, tourists and many in the United Arab Emirates have been able to easily make their choices when it comes to short-term vs. long-term rental in Dubai.
Both short-term and long-term rentals come with their unique set of benefits and detriments. Meanwhile, let’s take closer a look at both of these rental options, their pros, and cons to better understand what they hold, and which among the two would be a good match.
Benefits of Short-term Rentals
Better Rental Income
Investors or owners usually charge more for nightly use for their property on short-term rentals, in contrast to long-term property rentals. Even though the tenancy cannot be often predicted and it fluctuates, making the income from rentals not consistent, the income from short-term rentals mostly turns out higher in the long term. Sites like Airbnb now make it easy to find guests.
Freedom of Personal Use
Owners and investors alike are mostly inclined to use their rental property, while giving it out to for rent when the property is not in use. Property owners can as well easily block-out the dates that their property will be in use by them if it is listed on the market for short-term rentals. There is that freedom of giving it out or using it.
Lesser Wear and Tear
Most properties that are given out for short-term rentals are usually occupied during weekends, special seasons and occasions such as tourism or carnivals but not all year through. Hence, lesser use of the property delays the build-up of tear and wear.
Downsides of Short-term Rentals
Of course, short-term rentals come with their potential downsides. Since rental income comes from being able to book short-term guests all through the year, owners of short-term rentals will understand that they require enough effort in marketing their home. Such efforts include updating on listing sites, messaging interested guests, or even giving promotional discounts. In fact, to help lower cost, rental owners opt to manage tenant’s turnover on their own, just to help reduce costs. Also, guests’ expectation of the property will be high as they will be looking forward to a nicely furnished house, prompting owners to replace worn-out furnishings or replace old ones if need be- this is another cost to consider.
Benefits of Long-term Rentals
Steady Cash Flow
Generally, long-term tenants pay a consistent rental fee which can either be on a weekly, monthly, or depending on the arrangement. The investor can count on having a steady cash flow when compared to the fluctuations involved with the short-term rentals.
Utility Bills Paid
Most times, when tenants go for a long-term rental, the utility bills can be passed onto them. This can save investors some bucks during some certain seasons, especially during winter or summer.
Since the long-term rentals require fewer tenants coming into the property throughout the year, it means there will be less cleaning, less paperwork, and less vetting of possible clients. In general, this will reduce the need for the day-to-day management of the property.
Downsides of Long-term Rentals
Managing long-term rentals can be linked to some set of challenges that needs addressing. First, the consistency that comes with the cash flow is offset by lower-earning possibilities, when compared to short-term rentals. The reason for this is because it isn’t feasible to give a premium rate charge for long-term stays, as tenants tend to pay higher during weekends. Also, it is difficult to find long-term tenants during the off-season, so it is important for owners to plan ahead for long vacancy periods. Lastly, since guests will be staying for a long period, personal use of the property will be limited.
Short-term and long-term rentals both have their unique benefits and as well as downsides, but before worrying too much about the disadvantages associated with each of them be glad in the fact to have invested in a property that is well-positioned for rental. An investor may decide to position a vacation rental for either short-term or long-term, depending on the strategy that would maximize cash flow in their market or it can depend on the investor’s personal preference. At the end of it all, choosing between these two options can be tricky but there are many good options available.