When you offer your property to other people to rent, you have two options. You could rent it out long-term, taking on tenants who make it their home. The other option is to use the property as a vacation home. You can rent it out on a short-term basis, charging higher rates for shorter periods. However, how can you know which one is best for you? What’s the best money-maker, and what are the pros and cons of each option? Before you decide what you want to do, consider these important benefits and drawbacks of renting to either tenants or tourists.
One thing you need to consider is flexibility. This is something that you get more if you decide to rent your property in the short-term. You get to decide how long someone stays in the property, whether it’s a couple of nights or a couple of weeks. It allows you to fit any work involved around your own life. And if you want to use the property yourself, you can make sure the time you want it remains free. If you choose to take on tenants, you’ll have to follow the law. You won’t be able to use the property freely, and if you decide you want it back, you have to give notice.
Another thing to think about is securing your income. When it comes to cash flow, renting to tenants can often come out on top. The reason for this is that you can secure long-term tenants who pay their rent on time every month. When it comes to vacation homes, there’s no guarantee of bookings. There are low periods and high periods, which can balance things out. However, your property could be empty for weeks or even months at a time. This does depend on your location and your property, though. Some people will find they have constant demand.
The amount you can charge usually differs when you’re renting on a long-term or short-term basis. Generally, you can charge a lot more for a vacation home than for a tenancy. This is because you’re offering the property per night, or perhaps per week. Due to having busier and slower seasons, charging higher rates helps to fill in the gaps. You could potentially earn more from renting out your property in the short-term. However, this will only be the case if you have a suitable property in the right location.
Which Is Best for You?
It can be tough to decide which option is right for you. If you already own property, you should look carefully at demand in your area. Are there plenty of travellers who need places to stay? Or is there more demand for homes? However, you have more freedom if you want to invest in real estate you don’t own yet. If you want to try renting out a vacation home, you can identify the best area for it. But you will have to keep in mind that property prices could be higher in popular locations.
Short-term renting could be right for you, but long-term renting is often best too. It’s up to you to decide what to do.