When you invest in a rental property, the goal is to get the best possible return on investment. While many property owners opt for the long-term rental strategy, take a look at both strategies and decide which one is best for you.
Many owners have accumulated substantial wealth through traditional rental strategy. These properties are rented out on an annual basis with a fixed rent each month.
Having a year-long lease ensures your property is always occupied and low tenant turnover.
Easier to manage.
The tenants are responsible for the maintenance of the property.
Because the same tenants occupy the property for longer periods of time, long-term rentals tend to produce consistent rental income.
A short term rental is a furnished accommodation that is rented out on short periods of time, from a few days to a couple of weeks. Short term rentals have gained popularity in a past couple of years with travellers booking them as an alternative to a hotel room.
Short term rentals offer better returns, especially in popular destinations.
As you will be responsible for the management of the rental, short term rentals are well-maintained.
The best thing about owning a short term rental is that you can use it for yourself.
What’s the best option?
There are several factors to consider before investing in the type of rental.
Depending on the location of the property, income consistency you want, and how involved you want to be with your investment, you should decide on the strategy ideal for you.
If your property is located in a tourist destination and you have time to invest and your space, short term rentals can double the rent you collect every month. However, if you are looking for consistent income with a handoff approach, you probably better off with long-term rental.