It's proving to be an interesting year for real estate investors, as experts predict trends such as the housing market finally starting to return to normal in 2023.
As an owner or investor in real estate, you need to keep up with the latest trends and weigh all your options. For instance, are short-term or long-term rentals the better choice?
Here's what you must consider before making a choice and renting out your properties.
Benefits of Short-Term Rentals
What "short-term" means varies depending on your state and city laws, but in general, short-term rentals fall into the following timeframes:
- 90 days (three months)
- 180 days (six months)
- 30 days (month-to-month)
- Less than 30 days
Consider whether you want to rent out your property as a vacation home, such as an Airbnb situation, or if you're looking for a renter for a longer lease. It's rarer but not unheard of for landlords to rent out to applicants on a six-month or even month-to-month basis.
If you have a property that you only use for part of the year, you can earn extra income when you're not living there. This is a popular option among owners of multiple properties, as they still have their vacation spot but also earn more cash flow.
You could rent out your extra home as a vacation rental, turn it into an Airbnb spot, or accept shorter leases to take advantage of fluctuating rates, thereby increasing your income.
When you have a long-term tenant, they may not take care of your property, and you might not find out until they move out. It's harder to accumulate wear and tear in a short-term property.
You can inspect the unit or building more often, cleaning and performing preventive repairs, saving you more in the long run.
Benefits of Long-Term Rentals
A long-term tenant stays with you for a year or longer. Leases are usually for 12 months. The biggest advantage of long-term rentals is the reliability, which can mean less work for you, especially if you work with a San Francisco Bay property management company.
Consistent Cash Flow
When you have a long-term lease, the tenant provides you with a consistent and reliable cash flow. It's less unpredictable than short-term rentals.
There's also less turnover, which means reduced paperwork and less time searching and advertising for a new tenant. That's less management for you to handle, and full-service San Francisco Bay property management takes even more off your shoulders.
Build Relationships With Tenants
It's hard to predict whether a temporary renter will treat your property with respect. And while they're not there as long, some renters will be better about respecting the building and following the rules than others.
Short-term renters are often strangers. However, you may build relationships with your long-term tenant the longer they stay with you. If you're a good landlord or owner, they're more likely to care for the property as if it was their own.
What Kinds of Tenants Are Best?
There are pros and cons to short-term and long-term rentals. In the end, it comes down to your goals and how you want to use your property. You also have to consider local and state laws.
Regardless of the type of tenant you want, Kenny Realty can help you out with full-service San Francisco Bay property management services. Send us a message today to get an optimized rental value, learn about current market conditions, and discuss your goals.