Short Term vs. Long Term Rentals
There's a huge buzz these days about VRBO and AirBnB rentals and how one can house hack by renting out all or part of their home to short term renters, such as tourists, construction workers, etc. Like everything in life, each opportunity has its ups and downs.
I got into long term residential rentals at a very young age renting two upstairs apartments above a small commercial shop that I owned. I learned early on that you almost never get paid on the 1st like you're supposed to and that tenants can be very hard on your property. That said, the apartments did cash flow and I was able to pay my mortgage and put a little bit in my pocket each month. If something broke, I most often took care of it within a couple of days. The hardest part was just chasing my rents down around the 1st of the month.
About 3 years ago I starting buying short term rentals in the Midwest. The start up cost is higher than a traditional rental because you need to furnish the property in addition to buying it. I can be crafty and was able to purchase most things second hand but things like bed linens, towels, etc (of which you need multiple sets for) can also get expensive. Within a few days I got my first short term rental and I was off.
What I've learned is this. The expectation for things working (or getting fixed), being clean, and customer service is much much higher than that of a traditional long term rental. People on vacation need a sink fixed within hours whereas a long-term rental it might be a day or two. They can be very harsh with their reviews on the booking sites too. No matter how hard you try, you will most likely not please everyone. That's life.
Cash flow with short term rentals is generally higher but if you factor in the time spent it may be an even split. It really just depends on your location, the demand for short term vs long term housing, etc.
Give us a call today as we do offer management services in the Twin Cities for both short term and long term rentals and happy to provide more information regarding both.