Have you been doing some thought? Since you invest in real estate, your monthly income is based on the income from stable and reliable long term tenants. Life would be fantastic!
Though you feel you could perform better, something seems to bug you. Is it wise from a financial standpoint to switch from long term to short-term rental? Will the trouble be worthwhile? Definitely.
Though managing short term rentals could appear more difficult, the rewards could be far greater if you're willing to alter your strategy in order to boost your revenue. Now that has been said, let's explore:
Despite the unpredictable rental income, statistics and findings suggest that being a property owner allows you to make more money each month in the short term rental.
In order to maximize your profits during peak season, you may also set a minimum duration of stay and different pricing based on the high and low seasons in your area.
As a result, short-term property owners earn 50% more every month. Although bear in mind that other elements, like property type, location, and competition, are important.
When you rent a property for a short time, you can choose whether to use it yourself whenever you want or to use it whenever a block becomes free—say let's over the weekends—without creating any inconvenience.
The flexibility associated with short-term rentals is, obviously, far greater.
Due to the likelihood that short-term rentals will be filled during the busiest times of the year and on weekends, the impact of wear and tear on the property is substantially lower than it would be with long-term tenants.
Furthermore, short-term guests frequently use the property as a location to sleep and rest when they have free time.
Also, long-term tenants would, ideally, wait until a maintenance issue gets out of hand before informing the owner, whereas short-term rentals are generally better maintained because they are cleaned, alerted immediately for any issue, and ready for the next guest to walk into. Thus, a guest's perspective differs greatly from that of a tenant in every way.
For a while, converting to short-term rentals is appealing for a variety of reasons, particularly since it offers flexibility. However, this subject can be delicate.
For instance, you might like for the property to be empty when you decide to sell it in four months. As a result, signing a year-long lease arrangement could be challenging.
Another situation to think about is when you go on a few-month trip for business or pleasure and plan for the house to be empty when you get home, with the sole goal of making money in the months you're away.
Determining your market is key to running a successful vacation rental business. Real estate businesses disregard the demand for short-term rentals because their clientele favors long term stays, and never grab the opportunity to enter the market. Thus, running the risk of passing up on chances to enter the short term market.
However, before doing anything further, a property manager must conduct a thorough study and look into the traffic and different seasonal indicators for the neighboring tourism industry. If you want to determine whether there is a booming short-term market, look at the popular short-term rentals in your neighborhood. If their short-term rental business succeeds, yours will probably too.
One of the reasons many long-term rentals don't adjust their business strategies to include short-term rentals is that change can be intimidating for property owners, particularly when money is concerned.
A simple response is to start small and not be intimidated by trying new things by turning a few long term rentals into short-term ones. In this way, it is guaranteed that both your losses and gains will be limited. Additionally, you'll be able to make small mistakes and ultimately succeed greatly by learning from them.
No business can succeed without making some upfront and ongoing investments. Having stated that, the most beneficial investment you can make when it comes to managing short-term rental properties is Property management software, such as Hostaway, because it will aid you in minimizing your work schedules and enhancing your profits as you expand.
Software solutions such as managing calendars, guests, owners, staff, and booking channels are available for property managers/owners in helping with growing your business.
In general, it's not too difficult to attract guests for long term stays as most prefer to remain for a minimum of six months. While on the other hand, short-term rentals frequently need to draw in new guests all the time.
But with the help of well-known booking platforms like Airbnb, Booking.com, Vrbo, and many more, you can quickly reach millions of travelers in spite of the daunting nature of this unreliable revenue source. Also, with just a few clicks, guests can even book your property.
Property managers must, therefore, use a variety of advertising methods if their goal is to boost occupancy and revenue for their short term rentals.
From time to time, long term tenants may contact you if something requires to be fixed or a contract needs renewing. However, when it comes to short term guests, it is required from you to give a welcoming tour of your home. Also, while guests are staying at your property, it is anticipated for owners to be available 24 hours if questions may arise. Furthermore, you'll also need to spend considerable time speaking with the local staff who are on the property.
Additionally, you must create templates, reassure guests that you are always available, and give out check-in and check-out instructions in advance of their stay to assist minimize the number of guest inquiries. More significantly, each vacation rental should include a welcome book that has all the information a guest could need, such as WiFi passwords, directions to neighboring attractions, where to find additional blankets and towels, etc.
Given all of that, investing in tools like automation may reduce the effort and time required to streamline operations and enable you to expand your business rather than just keep it running.
Turning long term rentals into short term rentals definitely can be challenging. Consider it nonetheless. The key to success in business is growing and seizing any available chance to pursue new sources of income.
Furthermore, operating a short-term rental will be simple and worthwhile for your time and money when you have the correct vacation rental software to optimize your operations.
Having said that, the benefits of short-term rental, including the possibility for high earnings, flexibility, the opportunity to meet people from all over the world, tax advantages, etc. make it a fantastic alternative.