Pros and Cons of Hosting Long vs. Short-Term Guests

Should you turn your vacation home into a long-term rental (30 days or more), or a short-term rental (30 days or less)? 

The answer to this question ultimately depends on the nature of your property and what you hope to achieve with your vacation rental business. Both short and long-term rentals present benefits and challenges. Consider them below:

Short Term Rentals

Benefits

Profitability – Hosting guests on a short-term basis can lead to higher profits. This is because certain times of the year are more lucrative than others. Being able to change your property’s price-per-night based on demand is key for maximizing profits. 

Flexibility – Many hosts purchase a vacation home with the hopes of not only turning it into a rental property, but also using it for personal gatherings. If you want to host friends for the 4th of July or family on Christmas Eve, all you have to do is block out those dates on the calendar. 

Business Growth - The more clients you acquire, the more you will grow as a host. Not only will your profits increase, but so will your ability to provide an exceptional guest experience. Unique experiences are what keep guests coming back. 

Challenges

Being Constantly On Call– High-turnover requires high levels of commitment. Between scheduled cleanings, regular check-ins, and random guest requests, you’ll basically need to be on 24/7. Delayed responses can seriously hurt your ratings, so if you don’t have the time to respond in less than 24 hours, make sure you hire someone to help.

Marketing Efforts –Online marketing is essential to any rental business, but especially STRs. Due to high turnover rates, you’ll always need to search for more guests. Making sure your listing is consistently visible on booking platforms and social media is key to finding new guests. 

Stricter Regulations – In populated cities such as Los Angeles, local laws tend to limit how long an STR can be rented out for. It’s important to stay on top of local regulations in your city to avoid having to pay fines or undergo legal hassles. 

Long-Term Rentals

Benefits

Consistent Revenue – Locking in tenants for three to six months at a time guarantees profits for the duration of their stay. Although there’s certainly more money to be made through STRs, there’s no guarantee you’ll maximize your occupancy rates.

Invested Tenants – Guests staying for longer periods of time are more likely to take care of your property. Since they will be using your space for a longer period of time, they’re usually more invested in its maintenance. 

Peace of Mind – Renting out your property to new people every few days can be nerve wracking, especially if you have an emotional connection to the home. Securing long-term tenants allows you to be more selective about who you let stay in your space.

Challenges

Increased Wear and Tear - Long-term tenants tend to spend more time on your property than short-term guests. Although tenants will likely take better care of your appliances, they’ll also be making more use of them. This is especially true if they bring along pets or young children. 

Lack of Flexibility – Life can throw us through quite a few loops. In moments like these, you want to have the flexibility to do with your property as you wish. Maybe you want to offer it to a sick relative, or even move in yourself if your current living situation isn’t working out. Being locked into a long-term contract doesn’t allow for this. 

Decreased Control – Renting out your property on a short-term basis means you can check in on your home on a relatively frequent basis. Should any major damages take place or an appliance start falling apart, you’ll be made aware of the situation quickly. Long-term rentals don’t allow for regular check-ins, which could prove costly if you end up with a long-term tenant from hell!

If you want to maximize your profits by turning your rental into an STR, but don’t have the time to deal with the challenges it brings, contact MBX Homes today! We’re a full-service, vacation rental management company based in LA dedicated to turning your vacation home into a one-of-a-kind Airbnb.