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Short Term Rental vs. Long Term Rental

Want to quickly and consistantly make an extra income? Rent out your home, or your investment property! The question that often comes to the table is: “Which is more profitable – Short term rental, or Long term rental?” Does the length of rental commitment matter to overall income? Wouldn’t a long-term renter mean less stress? Won’t there be a shortage of short term renters because of availability, seasonal fluctuations, etc.? How can you learn the pros and cons for each rental style? Let’s have a chat, shall we?

A Common Misconception

Vacationers and Business travelers love Short Term Rentals!

Short Term Rental is a great option for vacationers and business travelers.

To uncover the facts, you must look at these two options below the surface. Financially and economical focus is essential. On the surface, long term rental seems more sound. It also seems like a whole lot less work. You are bringing in one client, estimating a rental time of 5 years on average, so the idea is that you will bring in more money. Hmmm, why is this a misconception? Let’s look a little deeper into Short Term Rental to uncover the answer.

Short Term Rental – The New Normal

A short term rental is classified as a rental occupied by a single client for 6 months or less. A short term lease is especially beneficial to traveling business clients and vacationers. Short term rentals are becoming the norm – the days of a hotel as the only away-from-home option are long gone!  The quiet atmosphere and comfort of a home over the stress of a hotel can’t be beat. With today’s open source traveling websites like AirBNB, people worldwide who are looking for a place to stay for the summer, winter, or any other short holiday, can easily find short term rental options.

Financial Benefits of Short Term Rental Uncovered

Short Term Rentals are more comfortable than a hotel!

Short Term Rentals are more comfortable than a hotel!

So, using your property as a short term rental as opposed to a long term rental usually IS more profitable! Why? First, owners can charge a higher nightly rate (translating to a higher monthly rate) than they would with a long term rental. It is likely that a single 3-day weekend could bring in the equivilent of an entire month’s rent in the ‘in season’ in any given city. Renting property can be compared to shopping at Costco: a customer who buys nights in bulk gets a discount, ( as in a 2 -year tenant ) but a customer who buys only a few nights, ( the short term renter ) pays a higher price. The long-term tenant will expect a lower monthly rent charge because he is committing. He is offering a sense of security to the property owners. A tenant who is renting a home for the summer, however, will pay more for the same exact property. He is paying for comfort, convenience and atmosphere, and because it’s short term, it’s only making a dent in his pocket. Additionally, if rent prices are on the rise in the economy, short term rentals can charge a higher rent price with each new lease. All these factors added together insure that the short term rental provides the homeowner with the highest income potential.

So then, back to our initial question: Want to quickly and consistantly make an extra income? It looks like Short Term Rental is the way to go!

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Booking Your Short Term Rental in 3 Easy Steps

Booking Your Short Term Rental in 3 Easy Steps

You’ve discovered you have a GREAT cash cow – a.k.a. a condo! You’ve decided Short Term Rental is the route for you to take to generate a side income. Now what? How do you rent out your space? Do you advertise? Where do you find guests? Here are 3 easy steps for booking your Short Term Rental.

Step 1 – Consult with a Property Manager

Booking your Short Term Rental is our specialty!

Book your Short Term Rental easily – we can show you how!

Want to be a hands-off owner? A property manager can take over and do all the ‘dirty work’ for you from A-Z, and just send you a check each month. If you are the quintessential ‘do-it-yourselfer’, a property manager can be your personal consultant, giving you support and guidance along the way. They teach you to market, manage and wrap up with each guest. You decide on the property manager’s level of involvement. Whether you want all or none, you WILL want at least a consultation. It’s a big, involved process to get started in, and although it can be very profitable, if done incorrectly Short Term Rental could be a huge expense.

Step 2 – Create a Marketing Management Plan

A Great Marketing Management Plan Includes:

  • Prepare the home
  • Photograph the home
  • Create a Listing
  • Connect your listing to listing websites
  • Monitor, optimize, and improve your listings as necessary
  • Respond to guest inquiries in a timely manner across all marketing platforms
  • Supervise and synchronize listing calendars
  • Continually adjust listing price dependent on seasons and special events
  • Screen potential guests to stay in accommodation
  • Provide off-site guest support as needed
  • Schedule necessary vendors (i.e. cleaning, repairs, etc.)
  • Monthly accounting records (i.e. income, expenses, and profit)

Step 3 – Welcome Your Guest!

Book your Short Term Rental with a pool easily!

A Short Term Rental with a pool is a hot commodity!

Is welcoming your guest really a part of the booking process? YES! If your guest gets a big happy welcome, chances are he will enjoy his stay all the more. A great start promotes a great stay, and a great stay promotes a return guest! Whether you greet your guest personally with pleasant conversation and a home tour, or have a gift basket on the counter and flowers on the table, making sure his first impression is a good one is essential!

Perhaps in ticking off items on our list, you are thinking, ‘just wait one cotton-pickin’ over-worked minute!’. If that’s the case, know that Short Term Rental Manager specializes in taking your property from step 1, to cash in your hand!

Read more abuot why Short Term Rental Manager might be a great shoice in this New York Times article discussing Property Managers.

Easy a pie for us, and no sweat for you! Let’s get started today!

 

 

 

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Investing in a Short Term Rental Property – How to Start

  • That leap into the wonderful world of investment property is a big one! Spending your cash for a Short Term Rental that will succeed as a part-time business is an art. If you are deciding it’s the route you want to travel, there are some purchase points where you will want to set your sights.

Decide on Your Focusvacation rental real estate invesotors

Will you aim for the traveling businessman? Then your location might be a condo by the airport. Are you family-focused? Perhaps a 4 bedroom investment property in the suburbs would be your choice. Is your goal to rent out your property for special events in your busy city? A centrally located option might best serve you. There are specifics you’ll want to look for in each of these scenarios. Each choice poses a variety of property options, prices, and locations. Setting your goals and desires down on paper is critical. There is research coming, but first, narrow your catagory so you can focus on what you want to buy and where you want to buy it.

Do Your Investment Property Research!

Single Family Homes make great Short Term Rentals

A single family home is a great option for a Short Term Rental Investment Property

Now is the time for number crunching. What is your income? How many discretionary dollars do you have? Can you swing a second mortgage in the event your rental goes dormant? How much house can you afford to buy in your desired neighborhood? Can you qualify for the mortgage? Will you need an investor to back you? You’ll need all your financial ducks in a row before you hire your realtor. Don’t fall in love with that modern updated condo on the 15th floor before you know it’s $ 50,000.00 more than your top dollar.

Although you can start your search on a do-it-yourself real estate website such as ZILLOW , you will want to enlist a trusted agent who knows the area; preferably one who has dealt frequently with investors. Your agent will go to bat for you and take you through all the red tape and technicalities involved with the purchase.

Go to ‘Landlord School’!

A great landlord translates to great income for your property! Don’t just ‘wing it’! Here at STRM, we specialize in training you to succeed at property management. Our goal is to empower you to master the skills required to manage your property well, such as:

Take great photos to help you sell your Short Term Rental

Great photos will help to sell your Short Term Rental

  • Deciphering the optimum pricing for the location and the property
  • Creating interest in your property through specialized marketing techniques
  • Staging, enhancing, and photogragraphing your property to create it’s ‘best face’
  • Keeping your home occupied
  • Navigating the perilous income tax regulation waters safely…..and much more!

Not quite up to the task yet? We can manage your property for you while you grow your management knowledge and polish your skills.

Investing in a Short Term Rental Property can be a daunting task. We are here to help you to manage the task and set you up for success! Feel free to email us with any questions.