Discover long term home rentals that feel like your own for stays of a month or more. From mountain cabins to urban apartments these homes offer all the amenities you need for a comfortable stay.
For beginner property investors renting out vacation rentals can be an easy way to get into the real estate market without having to pay for a home in full cash upfront. However, there are some drawbacks to this strategy:
1. Consistent Income
Long term rental properties provide a steady stream of passive income that can help support wealth building and financial stability. This consistent income also allows owners to more easily budget and forecast their finances.
This consistency can be a huge benefit for those looking to diversify their portfolios with real estate investments. However, before investing it’s important to consider potential risks and tax implications.
In addition to property management fees and rental rates, owners of vacation rentals must also pay for things like utilities, cleaning services, and maintenance. Additionally, linens and furnishings wear out quickly with frequent use. Luckily, long-term tenants can save on these expenses by paying their own utility bills. This can significantly reduce the overall operating costs of a long term rental.
2. Less Turnover
One of the best things about renting long-term is that it can help to reduce turnover costs. When you have a regular monthly rental income, it means that you don’t have to worry about advertising your property as much or dealing with the stress and expense of frequent vacancies.
You can also increase resident retention by carefully screening tenants before renting to them, and making sure that they’re responsible and respectful of your property. Ultimately, these tactics can help you achieve better tenant satisfaction and maximize your return on investment. You’ll want to keep a high tenant retention rate in order to minimize maintenance expenses and avoid expensive vacancies.
3. Less Maintenance
Long term rental tenants take care of utilities and cleaning, as well as perform basic yard maintenance. This can significantly reduce the property owner’s operating costs.
In contrast, short-term rentals require a lot of linens and furniture that must be constantly replaced and sanitized between guests. This can add up quickly and become costly.
Another problem with vacancy periods is that problems like plumbing issues or wear and tear can go undetected while the property is vacant. Unaddressed problems can quickly escalate into more expensive repairs and damage.
With a longer lease, there’s less risk of tenant turnover and the resulting hassles of marketing, advertising, and screening new tenants. And if you find a good tenant, they’re likely to renew year after year. This can significantly reduce vacancies, operational expenses, and headaches.
4. Less Stress
With a long term rental, owners have less worry about maintaining and promoting their property. Tenants usually furnish the house, pay utility bills, and take care of lawn maintenance. They are also more likely to treat the property well and want to renew their yearly lease.
Short-term rentals offer higher income potential, but require more time commitment and risk. Long term home rentals offer a steady stream of rental revenue and reduced vacancy periods, but may have higher operating costs. It is important to consider your investment goals, market dynamics, and risk tolerance before deciding which type of rental property is best for you. The right rental option will allow you to maximize your profits and minimize your stress!
5. Less Time
Unlike short-term rentals (like Airbnb or Vrbo), long term home rentals typically involve tenant-occupied properties under an extended lease agreement like a year at a fixed rent rate. Long-term rentals may be subject to strict local landlord-tenant laws that prioritize tenant protection and require more involvement from the property owner such as a security deposit, periodic property inspections, and tenant notice requirements.
However, longer rental periods and stable tenancies can save time and money by lowering operating costs through fewer maintenance requests from revolving tenants. It also means that property owners don’t have to spend as much time promoting the property or dealing with rental turnovers or cleanings. This can be a significant time saver for new homeowners and reduces overall management costs.
