Property owners considering renting out their space often wonder whether it would be better to use their property as a short-term rental (vacation rental) or as a long-term rental. Owners should consider their wants and needs, as well as factors like revenue, rental maintenance, and property usage when deciding to rent short or long-term. Here, Tripping.com takes a closer look at the differences between the two rentals to help you make the best decision for you and your rental business.
What is the difference between short-term and long-term rentals?
A short-term rental, or vacation rental, is the renting out of a furnished home, apartment or condominium for a short-term stay. The owner of the property usually will rent out on a weekly basis, but some vacation rentals offer nightly rates. The owner of the property will rent their space when they are not using it - though some rentals are shared spaces - especially during peak holiday seasons like in December or for New Years and times over the summer including the Fourth of July when higher rates can be applied. It’s also become common for people traveling for festivities like music festivals or sports events like the Super Bowl to rent houses or condos rather than pay for over-the-top expensive hotel rates.
Vacation rentals have surged in popularity in recent years for many reasons, especially because they often offer more privacy and space for a lesser cost than hotels.
With long-term rentals, the owner of the property rents out their accommodation on a long-term basis, receiving rent payments monthly typically.
Short-Term Rental Pros and Cons
Short-term rentals provide great advantages for owners, the first being flexibility. The owner can choose exactly when in each month their property will be made available to guests. Consequently, owners who want more of an opportunity to use their property often prefer to rent on a short-term basis instead of long-term.
Additionally, short-term rental owners might have an easier time getting away with charging higher rates, particularly around holidays and popular travel times, than a long-term rental owner. There are also big tax breaks for short-term rentals in terms of not having to report certain rental income to the IRS and also the opportunity to deduct property-related costs like advertising or operating.
Long-Term Rental Pros and Cons
There can be plenty of advantages to renting long-term as well. First is the fact that owners will receive rent payments monthly from renters, which provide a consistent payment plan and income for the owner. Another big plus for long-term rentals is that the monthly utility costs can be charged to the occupant.
With long-term renting, the owner often has less flexibility choosing when to use their property since the space is rented out for longer periods of time.
If you’re the owner of a vacation home or second property looking to rent it out, you've come to the right place! Sign up to list your home today.
This article was written by Cameron Lafontaine.