Today at Legends Realty, we will be talking about short and long term leases. Rental properties fall into two categories – long term rentals and short term rentals. When you rent your home out for the long term, you know you’ll have the same tenants in place for an extended period of time; usually at least a year. Both the landlord and the tenants sign a lease, or a rental contract that stipulates the length of time for that long term tenancy. With a short term rental, you’ll also have a contract in place with the renter, but it will be for a shorter period of time. It might be several months or as few as two or three nights. Many investment property owners aren’t sure whether they should rent their property out to long term or short term tenants. There are benefits to both types of leases.
Short Term Benefits
Renting your property for the short term makes sense if it’s located in an area that has a heavy tourism business. If you’ve got a condo that’s close to the beach or a property in Orlando that’s a short drive to the theme parks, you have a good chance of keeping that property occupied on a regular basis. Short term rentals will only work well in markets where there is demand. You can charge a lot more for short term stays and you’re able to raise the rent more frequently, so if you do live in such a market and you have a property that’s close to what vacationers are looking for, it’s a good idea to stick to short term leases. You can also market your property to people who travel to the area frequently for business or to families who might be relocating and need a place to stay while they find a permanent home.
Long Term Benefits
The best reason to maintain a long term lease is that you have consistent and dependable rental income throughout the entire year. You won’t have to worry about keeping your property occupied during slow tourist months. There’s a lower vacancy rate and you can do better long term planning and budgeting when you know you have the same renters in place for a year or longer. There are also less expensive advertising costs because you won’t have a lot of tenant turnover. Your long term tenants are also more likely to take good care of your property since they’ll be making it a home instead of a temporary place to stay.
As you can see, there are a number of benefits to long term and short term rentals. The best choice for you really depends on your property’s location and what you hope to achieve from your investment. If you have any questions or you need help making this decision, please contact us at Legends Realty.