When you’re buying the property, you would be looking to put it up for rent. You need to understand that while the rental income can help you set the maintenance cost but you have to choose the rental strategy properly. Many people just opt for the short-term rentals. You need to understand that short-term rentals are not a good strategy always. In many of the cases, the property would be vacant for a long period of time. During this period of time, you would not be able to get the maintenance cost as well. That is why you have to look at the reasons as to why the short-term rentals are not a good idea.
1. Highly dependent on tourists:
The short-term rentals are highly dependent on tourists. Therefore, if there is any disruption in your city, you can be sure that the property would be vacant for a longer period of time. That is why short-term rentals are not a good option as the vacancy rate is often pretty high as compared to the long-term rentals.
2. Short-term rentals would not be affordable for locals:
If you really want to get someone who is reliable and would be staying in the property for a bit longer, short-term rentals would not be suitable for them. In such a case, the locals would simply not approach you as the short-term rentals are often twice that of the longer term ones. That is why you would be only reliant on the tourists as well as people coming from other cities.
3. Increases your responsibility:
When you’re giving the property on short-term rentals, you would realize that the maintenance cost is on the higher side. Also, in case your property is located in a tourist city, you would have to clean the property pretty quickly well before the next tenants move in. Only once you are able to do that, it would become easier for you to rent out the property as well. That is why it is important for you to understand that short-term rentals would put more pressure on yourself as well.
4. High fees:
When you are asking the real estate agents to find the short-term tenants, oftentimes the commission of the real estate agent would be on the higher side. Moreover, the websites which are providing you with such tenants would also be charging you a higher fee. That is why; larger percentage would be going in commissions. Thus, the amount of money which you would be able to get would be on the lower side. That is why, you have to keep all of these factors in mind and thereafter distinguish between the short-term rentals as well as longer term rentals.
So, when you’re negotiating between buyers and sellers, you have to understand how you are going to rent the property. Before approaching the Listing Agent , it is a better idea to know the difference between short-term rentals and long term rentals and why short-term rentals are not a good idea. Once you are able to look into this one, it would be easier for you to understand why you need to avoid the shorter term rentals.