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title: Short term rental vs. long term rental – what may be best for a host?
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## Short term rental vs. long term rental – what may be best for a host?

Resortifi gives hosts the platform for both short- and long-term rentals;
however, which one they prefer the most, is solely based on their personal
preferences and some factors. 

When it comes to rental property, you’ll want to ensure that you’re getting
the best returns possible.

One consideration that can impact the returns that you’re generating is the
way that you choose to rent out your property, whether you rent it as a
short-term   rental,   also   known   as   a   vacation   rental,   or   as   a   long-term
residential rental.

While long-term residential properties can be a great way to generate wealth
and when done right, can even serve as a form of passive income, vacation
rentals offer a number of advantages as well. Namely, the fact that in some
especially  hot  vacation  markets,  they  can  be  a  way  to  generate  more
income, or at least, more gross income.

But are vacation rentals everything they’re cracked up to be? The answer is:
it depends! The profitability of your property as a vacation rental will hinge
on a number of factors, including where the property’s located –and how
popular that destination is. Another thing to consider is management costs.
With a short-term rental, there are a lot more maintenance and ongoing
management costs, which can quickly eat into your profits.

If you’re on the fence about operating your rental as a long-term or vacation
unit,   or   if   you’re   in   the   market   for   another   investment   property   and
considering a vacation rental, then read on to know the pros and cons of
each to help you discover the best option for you.

## What’s Considered a Short-Term Rental?

Before we get started, let’s quickly clarify what is considered a short-term
rental. While the exact definition can vary, most would consider a short-term
rental to be anything rented out for less than a month. Vacation rentals are
usually considered short-term rentals, while long-term rentals are those that
are rented out for long periods of time. 

**Pros:**

- **The Potential for More Income:**

Short-term rentals can bring in more money than long-term residential units.
Of course, your gross income will often be offset by expenses –so you’ll want
to keep in mind that your net income will most likely be much lower. The
reason that these properties tend to bring in more income is that they’re
often located in popular vacation destinations, and are usually priced higher
than their long-term counterparts since vacationers are usually willing to pay
more than residents.

- **More Flexibility:**

Another reason you might consider a vacation rental is if you are planning to
visit the area yourself and would like to stay there. With a short-term rental,
the owner has the ability to use the property whenever they wish; you can
simply block out the days that you’d like to stay at the property. Having a
vacation rental can be a great way to avoid having to stay in a hotel when
visiting, while still generating an income the rest of the year. This is in
contrast to a long-term rental, which is almost always continually occupied
unless you time your visits to a period when you’re in between tenants.

- **Damage is Often Easier to Spot:**

While short-term rentals may see a lot of visitors, the short-term aspect
means that there’s time to keep up with maintenance, and crucially, to spot
small problems before they escalate into bigger issues.

- **The Ability to Adjust the Rent at Any Time:**
  
Another   benefit   of   short-term   rentals   is   that   you   can   adjust   the   rent
whenever you’d like. As long as it’s in line with the market rate, that is. With
a long-term rental, you’ll need to wait until the lease expires. Or until the
next month if your tenants are on a month-to-month lease.


**Cons**

- **More Expenses:**

While these properties often generate more income, keep in mind that a
good portion of that will go into management and upkeep. Cleaning and
management costs for short-term rentals are much, much higher. You’ll have
to ensure you are either cleaning yourself in between visitors or have a
reputable housekeeper who does it for you.

- **Loss of Income During the Off-Season:**
  
Another downside with short-term rentals is the dreaded off-season. While
peak season means that your rental might be occupied, the off-season
means more vacancies and the loss of income. If your short-term rental is a
vacation rental in a popular vacation spot, you must consider if the area is
popular year-round, or if there are peak times when it is most popular. Be
sure to factor in the cost of your rental sitting empty for long periods during
the off-season.

- **More Legislation to Follow:**

Another potential downside to short-term rentals is that there’s often more
legislation   to   follow,   especially   in   hot   markets,   where   cities   may   have
implemented their own regulations surrounding short-term rentals. Some
cities have limited the amount of time a property can be rented as a vacation
rental, while others have even banned them altogether or restricted them
from operating in certain districts.


- **Higher Risks**
  
The events that have taken place over the last couple of years have made
things financially challenging for many short-term rental owners. Lockdowns
and travel restrictions that were implemented in many states impacted the
vacation industry.

## What about Long-Term Rentals?

**Pros**
- **Reliable Income:**

First up, one of the benefits of long-term residential units is that it allows you
to generate steady, predictable income. When it comes to long-term rentals,
you don’t have to worry about extended vacancies or seasonal downtime.
While it is certainly possible to have some gaps in between tenants, your
downtime in between tenants should be minimal. Ideally, 2-3 weeks at the
most.

- **Lower Operating Expenses:**
  
With long-term rentals, your expenses are much lower than with short-term
rentals. With residential units, your tenants will pay for most of the operating
expenses such as utilities, electricity, water, sewer, and more.

**Cons**
- **Less Income:**

One of the main risks of having a long-term rental is that in a popular,
booming tourist destination is that you could be losing money if you’re
running a long-term rental as opposed to a short-term one. Still, this depends
greatly on the market in question and what your returns would be after
expenses.

- **Risk of Unqualified Tenants:**

Long-term rentals carry the risk of unqualified tenants gaining access to
your property. Of course, bad guests are a risk with short-term rentals too,
although their duration will most likely be much shorter. Fortunately, though,
this risk is one that can be mitigated by implementing an airtight tenant
screening policy offered at Resortifi. It’s the best way to reduce your risk and
ensure that you get qualified tenants in your property.

- **Less Flexibility:**

Long-term rentals also have less flexibility. You can’t simply raise the rent or
use the property when you need. The loss of flexibility can lead to loss of
profit if you’re not careful to plan ahead.

- **Challenging Maintenance:**

Long-term rentals tend to experience less wear-and-tear than their heavily
used   vacation   counterparts,   but   there’s   a   downside   to   this   as   well.
Maintenance often goes unperformed or undetected with long-term rentals,
especially   when   there   are   longer   tenancies.   Delays   can   lead   to   more
extensive repairs or maintenance needing to be done once the issues are
finally discovered.


**Which Option’s Best for You?**

There is no right or wrong way to invest. Instead, it’s all about choosing the
best route to help you reach your goals the most effectively. So make sure
you take the time to sit down and assess your big-picture objectives from the
start. This will help you to create an investment strategy that’ll enable you to
reach your goals, and save you from wasting time and resources, not to
mention tying up your capital in an asset that’s just not performing as well as
it could be.
