The popularity of short-term rentals has grown exponentially over the last few years. As a San Clemente rental property owner, you may be thinking about buying or converting one of your properties to a short-term rental. Before you do, it’s a smart move to carefully analyze both the pros and cons of owning a short-term rental property. Even though short-term rentals are a good fit for some, several investors may believe that the volume of work needed isn’t worth it.
Probably the number one advantage to owning a short-term rental property is the ability to increase rental income. Short-term rentals generally rent for more per day than a long-term rental would. Therefore, if you can keep your property rented out, you could earn quite a bit more each month than you’d get from a long-term lease. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
Another important benefit of owning a short-term rental is that it brings a lot of flexibility. Depending on how you deal with it, you could be renting your property a week at a time or for several months. If your rental property is in a nice vacation spot, you can utilize vacancies as a possibility for a personal getaway. You can also easily manage your property on rental platforms like Airbnb, which indicates that you will never have to negotiate with leases. You can also remove your listing from those sites at any time if you decide to turn your property back to a long-term rental.
On another note, there are a few drawbacks to owning a short-term rental. Although there is often a great potential for higher income, that income is a lot less stable. Most short-term rentals suffer from seasonal fluctuation, which means your property might be staying unfilled a lot more than you would like. Although good marketing and creativity might help you avoid this, it’s imperative to note that even your best efforts may not be enough. Short-term rentals are very dependent upon economic conditions, and economic downturns often result in less demand.
Another significant problem with short-term rentals to remember is that you will have higher costs. Preparing a short-term rental could mean needing to furnish it and stock it with essentials. If you want your property to be competitive, it is necessary to have pleasant furnishings and décor. You’ll also need to make sure that your tenants have things like linens, toilet paper, pots and pans, and more. These things must be re-stocked between tenants, which can start to add up over time.
There will also be supplementary cleaning and maintenance required for a short-term rental. If you’re doing this alone, getting the room ready for the next tenant will take quite a bit of your time. But hiring people to accomplish it for you could get expensive, especially if your property is in high demand. It’s important to make sure that the area is being thoroughly cleaned between tenants and that mandatory maintenance and repairs are being done correctly and efficiently. If you’ve failed to complete that, it could result in bad online reviews and fewer bookings sooner or later.
After all, it’s necessary to check state and local regulations on short-term rentals. Most cities have implemented strict regulations preventing short-term rentals in some areas, and so have many homeowners’ associations. Because restrictions will vary from place to place – and even from neighborhood to neighborhood – it’s important to do your research before buying or converting a property to use as a short-term rental.
Need help managing your current rental property? Give Real Property Management Agile a call at 949-503-5300. Or conveniently contact us online.
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