The properties that we own beyond our permanent address can be more than homes away from our actual homes. They can also become a means of investment if we wish to grow our wealth beyond the usual ways. In real estate investment, those with multiple properties can rent out their spares.
As landlords, there are two paths we can choose from: short term rental or long term.Both are viable business models. They are also both applicable to all properties – even any condo along Ortigas Avenue that was bought during preselling.The question now is, which path should we choose?
The obvious answer these days is short term rentals. But what is it about long term leases that make them the less popular choice?
Many like the concept of long term rentals because of the consistency they promise. Considering how long the leases tend to be, a minimum of which is typically around a year, that’s about twelve or so months of guaranteed income.
Landlords with long term rentals don’t have to worry about offseasons, where their properties are less likely to be booked. However, this constant renting comes with a downside. The period in which we rent out our properties is also the length of time we expect them to treat our properties well.
In short term rentals, there are devices at hand that allows landlords to track how good of a guest a person is. Long term rentals aren’t as fortunate. Landlords have to spend more time screening each potential tenant. Tracking their credit score is one thing, and so is checking their criminal history.
Accomplishing these may help prevent problems in the future. Like having to boot out someone that proves more trouble than worth it.
Intense Wear and Tear
Short term rentals are much easier to maintain. This is because landlords can oversee their properties in between bookings and tend to anything that needs upkeep. The same cannot be said for properties that are put up for long term lease.
Landlords don’t have to worry about simple household management, like cleaning the premises and keeping toiletries stocked because tenants are obligated to do so for their own use.However, more permanent damages still have to be seen to by landlords. Like broken heating or pipes.
And it’s more likely for properties to incur such hits throughout the contract since they are always in use.
Homeowners usually purchase other properties for the sake of using them when they need to get away.Short term rentals offer this opportunity still. In between bookings, landlords can stay on their own properties for some much needed R&R.
It doesn’t even have to be during off-seasons since they have a lot of say when it comes to scheduling. Landlords of long term rentals aren’t as fortunate considering the duration of each lease.Aside from not having personal getaways, consistent earning can have some drawbacks, too.
The price of short term rentals is not set in stone. Depending on the landlord, there can be premium prices for regular stays which only comes down a bit when guests decide to stay longer. Not only that, but they can also set fees for cleaning.
With all of these disadvantages, it’s no wonder why many homeowners are drawn to the prospect of opening their homes on short term bases. Still, there are a select few who prefer the stability that long term rentals provide regardless of its downsides.