Whether you’ve decided to buy an apartment for investment or, for various reasons, have the option to rent a property , you need to know the advantages of the main types of rental: short-term and long-term. At Edifica , we’ll explain each of these in detail so you can make the best decision.
Advantages of long-term rental properties
There are several advantages to investing in long-term rental properties. This typically means tenants sign an annual lease; however, latvia phone number library it can also be month-to-month. Here are some of the biggest advantages:
1. Constant income
Because the same tenants occupy the property for long periods, long-term rentals tend to produce consistent rental income. Plus, you won’t have to worry about finding recurring tenants, as your property will be occupied for a set period of time.
2. Easier to manage
Whether you choose to manage the property yourself or hire a property manager, long-term rentals require less time. You don’t have to list the property as frequently, manage constant tenant turnover, the power of social media in modern education or ensure the property is rent-ready.
If you don’t want real estate investing to be a chore, or don’t want to pay a fortune in property management fees, long-term rentals are probably for you.
3. Utilities paid by the tenant
Long-term tenants typically pay their own utility bills, such as water and electricity. Unlike short-term rentals, bgb directory where you’re responsible for paying the bills, tenants often aren’t concerned about conserving and saving on these utilities, which increases their costs.
4. Less maintenance worries
In short-term rentals , the landlord covers the apartment’s maintenance costs. However, when you rent a property long-term, the tenant generally has to pay a security fee in case any damage is caused, so you won’t have to worry about this aspect.
5. More affordable property management
Because they have lower turnover and ongoing maintenance and marketing requirements, hiring a property manager is much more cost-effective with a long-term lease.
The market rate for long-term property management tends to be 8% to 12% of the rent collected. On the other hand, hiring a property manager for a vacation rental can cost 25% or more of the rental income.
Advantages of short-term rental properties
While long-term rentals are great for consistent income and ease of management, there are some compelling reasons to consider a short-term rental:
1. Greater income potential
Short-term rentals can generate more money, plain and simple, especially in a popular vacation area. A property that could fetch a certain amount per month from a long-term tenant can often generate more than double that amount as a vacation rental.
While management fees are generally higher with short-term rentals, the increased income potential can more than offset that cost.
2. Better maintenance
Because a vacation rental owner will typically have the property thoroughly cleaned each time it is rented (and pass the cost on to the tenant), vacation rentals are generally better maintained.
That way, they’re not only cleaned frequently, but because there’s more frequent rotation, it can be easier to identify maintenance issues before they become bigger issues.
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3. Ability to adjust prices
In addition to the increased income potential, short-term rental owners have the added luxury of being able to adjust prices as they see fit. If inventory is filling up quickly, a landlord can raise the rent to maximize profits.
4. Personal use
By renting your property for short periods, you can occupy and enjoy its facilities during the time you don’t want to rent.
5. Self-management is becoming easier
Until a few years ago, managing a vacation rental was like a second job. That’s no longer the case. Platforms like Airbnb allow owners to list their properties, and technological advances, such as smart locks, have made it easier to manage vacation rentals, even if you don’t live nearby.
So, while managing a vacation rental is still more complicated than managing a long-term rental, it’s much easier than it used to be.
If you’re looking for an investment property, remember that Edifica Real Estate has 15 years of experience developing projects in the most established districts of Lima and other cities.
Our apartments feature an excellent location and multiple common areas such as a lobby, cardio room, social room, pet shower, bike zone, and much more.