Why landlords should choose long-term rentals

Short-term vacation rentals like Airbnb are very popular. However, for many landlords focused on short-term rentals, the higher income during the peak winter months does not provide the cashflow needed from their investment property.

As a result, landlords wrestle with this question: short term or long-term rentals? The
decision hinges on many factors, including time commitments, cashflow considerations and regulatory issues.

Time management: Time is a critical consideration for landlords. Short-term rentals demand extensive time and effort due to the constant turnover of guests. Tasks like
advertising, cleaning, restocking and handling emergencies create a cycle of responsibility that can be overwhelming. Dealing with property damage, maintenance issues and booking cancellations further complicates the process.

In contrast, long-term rentals offer a more streamlined experience, meaning landlords focus primarily on rent collection and occasional maintenance requests.

Cashflow: From a financial perspective, long-term rentals usually provide a more stable and predictable income stream compared to short-term rentals. With tenants typically signing year-long leases, vacancies are less frequent, leading to a more consistent cashflow. Long-term tenants often assume responsibility for utilities, lessening the landlord’s burden. Long-term rentals also exhibit greater flexibility to market disruptions, as was experienced during the pandemic when demand for long-term rentals remained strong while there was a dramatic decline for short-term rentals. The long-term stability appeals to landlords.

Regulations: Short-term rentals are subject to regulations imposed by cities. These regulations can include permit requirements, tax obligations and adherence to health and safety standards. Violating these rules can result in fines and legal consequences. Long-term rentals, while still subject to regulation, typically adhere to standardized laws governing landlord-tenant relationships, offering greater clarity and stability.

The choice between short- and long-term rentals requires careful deliberation. Ultimately, landlords must weigh these factors against their own preferences and circumstances to determine the most suitable rental strategy.

If you’re a landlord facing challenges with your short-term rental property, feel free to reach out to us. We can assist you in smoothly transitioning to a more profitable long-term rental arrangement.