.jpeg "Comparing Long Term Vs. Short Term Vacation Rentals For Investment")
The real estate industry is always a great choice for investors who want to rake in some passive income on the side. As with any type of business, real estate investors have various considerations to make before building and marketing their properties. In recent times, the major consideration has been that of long term vs short term vacation rentals. Long term rentals are for people looking to stay for months or longer, while short-term rentals are for people looking to spend a night or several days, as with vacation home rentals. If you’re a prospective property investor stuck on this same predicament, see how the two options compare below.
First off there’s the issue of demand. After all, the best business ideas are born out of necessity. Long term rentals are for people looking to relocate for business or resettle their families. And due to high property prices, and a millennial generation that is not very keen on purchasing mortgages, demand for long-term rentals is high most of the year.
Short-term vacation rentals are mostly for tourists passing by during their travels or those visiting to see the local attractions. As such, demand is highest when there’s a holiday around the corner or when people have lots of disposable incomes and want to treat themselves a little. Otherwise, the demand fluctuates and sometimes dips in between these peak periods.
As an investor, you’re also going to be very concerned about the kind of revenue you can expect with these two different property markets. Long term rentals generally rake in less revenue per day. However, because they are rented out for longer periods, they do make up for that by offering the investor stable income over longer periods.
Vacation home rentals cash in premium rates most of the time. And the rates only get better during the holiday seasons and around public holidays. The only challenge here is that this revenue is not guaranteed and is pegged on how well you market your property, as well as how you fair with your competition.
In regards to setup costs, long term rentals and vacation rentals don’t have much of a difference. The main determinants here are what type of units do you want to build and how big and fancy will the units be? Long term rentals are mostly located in prime locations which are costly to acquire. Also, if you’re going to build a storied building, that will need a huge capital injection as well. The only relief you enjoy when setting long term rentals is that you can choose to keep the units unfurnished.
Most vacation rentals are situated out of towns where land is often cheaper. The buildings are also designed for single family dwellings so they don’t have to be expansive. However, they do need classy furniture and luxury additions that are pricey, e.g. heated pools, Jacuzzis, pergolas, etc.
When it comes to managing your property, long term rentals only need work when you’re in between tenants. That’s when you touch up the house (unless it needs serious repairs), advertise the unit, and handle the exchange with the incoming tenant.
With vacation rentals, management is an ever ongoing process. After all, you’re always booking fresh guests, having the property cleaned, posting vacation rental listings, and what not. And this can be costly. Well, unless you use resources such as HomeEscape where you can list your vacation properties without paying any commissions. You can compare HomeEescape with other listing sites here. The upside with these rentals in terms of management is that there’s rarely any repairs needed because the guests barely stay.
One important factor to consider when investing in a vacation rental is location. There are many popular vacation destinations where occupancy rates can be high year-round with the right marketing tools. Here are some of the most popular destinations on HomeEscape:
1. Panama City Beach Vacation Home Rentals
2. Destin, FL Vacation Rentals & Condos
4. Gatlinburg Vacation Rentals & Cabins
6. Orlando Vacation Home Rentals
7. South Padre Island Beach House Rentals
8. Vacation Rentals in Las Vegas, NV
