Short or long-term rentals: Which one is best for you?

If the weight of managing your rental properties has you tossing and turning at night, don’t worry: we’ll get you there with this quick but comprehensive guide!

UNDERSTANDING THE PLAYING FIELD

Short-term rentals, typically lasting less than a month, present a tantalizing opportunity.. These properties promise potentially higher revenue in a short period, thanks to greater per-night rates.

Long-term rentals, usually leased for more than 30 days, offer a steady income and more manageable workload. However, they may not generate profits as quickly as their short-term counterparts. Extended vacancy periods along with consistent upkeep and repairs can also be an issue.

4 CORE CONSIDERATIONS FOR PROPERTY MANAGERS

Let’s drill down on the four key elements that property managers need to keep in mind when managing their rental properties:

1. The power of place
   For short-term rentals, your aim should be to procure properties that are within the vicinity of major attractions, recreational spots, or event venues – these are surefire crowd-pullers. Being located close to these hotspots allows you to command a higher rate for short-term stays.

   On the other hand, long-term rentals call for a different strategy. Their appeal lies in the practicality of the location rather than its popularity. Properties in areas with access to quality schools, extensive amenities, and reliable transportation tend to draw in long-term tenants seeking stability and convenience.

2. Breaking it down into dollars and cents
   With short-term rentals, the financial obligations extend beyond the initial purchase. It includes an array of upfront and ongoing expenditures.

   Firstly, you’ll need to furnish the property. Secondly, consider operational costs, which are recurring expenses like utility bills, regular maintenance, and marketing costs to ensure your property remains visible and pleasing to prospective guests. Lastly, the accuracy of your calculations is crucial in pricing your rental. You don’t want to underprice your rental and you also want to create a buffer for unforeseen expenses.

   For long-term rentals, factor in taxes, insurance and maintenance costs, and a screening process that involves background checks for creditworthiness or capacity to pay rent, references, income verification, and so on. Keep in mind that the Fair Housing Act prohibits providers of housing to make rentals unavailable because of a person’s race or color, religion, sex, national origin, familial status, or disability.

   Short-term rentals promise higher returns, but less stability. High vacancy rates can leave you counting costs instead of profits. On the other hand, long-term rentals may not dazzle with big numbers, but they do offer consistency by providing a steady income stream.

3. Staying on top of turnover, upkeep, and maintenance
   As property manager, it falls on you to oversee tenant transitions, preserve your property’s integrity, and address any maintenance concerns as quickly as possible.

   Short-term rentals mean dealing with constant turnover, necessitating frequent cleaning, maintenance, repairs and/or upgrades, and restocking supplies to guarantee a pristine, inviting experience for every new guest.

   Long-term rentals also demand regular and preventive maintenance, as well as timely responses to tenant questions and issues. How you deal with these concerns may lead to either renewals or early terminations of lease agreements. Don’t forget that a tenant who renews or signs a longer-term lease agreement reduces your turnover costs.

4. Ensuring legal and regulatory compliance
   Stepping into property management is more than just meeting obligations, abiding by zoning rules, managing security deposits, and navigating eviction procedures. It is, first and foremost, about protecting your investment and seeing it grow.

   So it’s wise to keep your finger on the pulse of all local, national, and federal laws that directly affect your rental properties. Investing in the expertise of a legal advisor or consultant is an option to consider.

At Berkshire Hathaway HomeServices Caliber Realty, we know that not everyone has the time or desire to manage their rental properties the way they were meant to be handled. It is our goal to help experienced and inexperienced landlords manage the financial and day-to-day aspects of their rental properties in Bryan-College Station and the surrounding areas.

Why choose Berkshire Hathaway HomeServices Caliber Realty?

With over 60 years of combined management experience, our property management staff knows what it takes to keep your rental property in top condition, providing you with reliable rental income.

For all your property management needs in College Station,TX and beyond, Berkshire Hathaway’s property management team is always just a message or a phone call away at 979.694.8844.

We’ll set the stage for your success and make managing your property a breeze!

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