Short-term rentals are getting very popular these days. As an Oxbow rental property owner, it may have crossed your mind to buy or to convert one of your properties to a short-term rental. Some are active proponents for short-term rentals, while other investors think it is not worth it. Don’t just jump into the short term bandwagon, do your work first and examine the pros and cons of owning a short-term rental property.
Probably the main advantage of short-term rental property is the higher income it generates. Short term rentals gain more money on a daily basis compared to long term rentals. So your property can earn more than a long term lease, provided tenants are always available. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
One more advantage of owning a short-term rental is the flexibility it offers. You have the freedom to have your property rented for a week or a month at a time. If your rental property is in a nice vacation spot, you can take advantage of a personal getaway whenever there are vacancies. Take advantage of rental platforms like Airbnb by setting up your property there and say goodbye to leases. Switching your property back to a long-term lease can be done anytime by removing your listing from these sites.
On the other side of the coin, there are a few drawbacks to owning a short-term rental. It’s true that it rakes in cash but this is not stable. Most short-term rentals experience seasonal fluctuation so this could mean that your property wouldn’t be making money for a long time. While marketing and other smart plans can help generate revenue, always remember that dire situations can undermine our best efforts. Short-term rentals are very volatile to economic conditions, and economic downturns often result in less demand. For example, you may have noticed that the short-term rental market has suffered a lot this year due to stay-at-home orders and travel restrictions caused by the pandemic.
Another disadvantage that you should remember about the short-term rental is the higher costs that it entails. Furnishing and buying essentials is part of the preparation of a short-term rental. Of course, you would want your property to be competitive so you need to invest in nice furnishings and décor. You also need to make sure that your tenants always have things like linens, toilet paper, pots and pans, and more. These items will need to be re-stocked between tenants so your expenses will pile up over time.
For a short-term rental, cleaning and maintenance is a very big factor. Plus, if you’re doing all the preparations for your next tenant, this will require a lot of your time and effort. You could hire someone but this will also prove to be expensive especially if your property is in high demand. It is very important that you clean between tenants and maintenance and repairs are done on time. If not, then you could suffer from bad online reviews which would hurt your business because there would be fewer bookings in the future.
Finally, it’s best to be guided accordingly so it’s important to check state and local regulations on short-term rentals. There are cities that have strict regulations and homeowners’ associations that do not allow short-term rentals. Also, restrictions vary greatly from city to city or place to place so do your research first before converting your property into a short-term rental.
If a longer-term Oxbow rental sounds more stable and profitable for you, contact Real Property Management Optimum. You can contact us online or call us at 320-289-4649 .
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