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Short Term vs. Long Term Rental: Which Is Better for Airbnb Hosts?

If you are thinking about investing in rental properties, you will surely face this dilemma—choosing between short-term rentals or long-term agreements. Though both of them come with passive income benefits, each offers its own advantages.

In this article, we will look at how to generate wealth with AirBNB properties, learning which type of property is more appropriate for you and what this type of investment looks like.

1. Guest Experience

For short-term rentals, you will encounter a lot of guests as they’ll only spend a few days on your property. Usually, they’ll pay for their stay upfront, and you can ask for a security deposit or a credit card on file through which you can charge for damages. There’s always the risk of damaged furnishings due to quick turnover, but most of them will be minor.

On the other hand, long-term rentals require the signing of lease agreements as they last for a long time. Usually, long-term guests provide deposits and settle rental payments monthly.

It might seem that long-term might work best, but there’s always the possibility of dealing with a difficult tenant. They might not pay on time, or they might not settle payments for damages. You can read about the laws regarding renters in your state, so you’ll be aware of the right moves to make.

2. Profitability

Starting a property rental business has one primary goal—gain profit. Which one would be more profitable? The quick answer is short-term rentals.

The reason for this is that with the use of the rental arbitration model, a la Airbnb, investors can pick up multiple properties compared to buying properties with binding mortgages.

For short-term rentals, your costs usually revolve around household necessities, cleaning services, property management, furnishings, and utilities. However, for long-term rentals, you usually have to settle a 20% down payment, property taxes, homeowner fees, and utilities.

Another thing to consider is that long-term rentals offer a more stable income. Short-term rentals may bring more income only if you are willing to spend time marketing your property and keeping it occupied for most of the year.

3. Cleaning and Maintenance

Short-term rentals require a lot of cleaning and maintenance, as you have to ensure that the property is sanitized and squeaky clean before the next guest arrives. Usually, this is done daily, so you might need to hire a cleaning service to do this for you.

In contrast, you don’t have to worry about day-to-day cleaning when it comes to long-term rentals. Your help will only be called in for significant issues such as damage to the infrastructure or broken appliances.

4. Flexibility in Occupancy and Pricing

One strong advantage you can enjoy with short-term rentals is how flexible they can be. You can apply market trends and change prices due to seasons and dates—pricier in the weekends and holidays, or perhaps, during winter or summer.

If you have additional amenities or if your property is aesthetically pleasing for social media photos, you can also add a few dollars to your pricing model. Plus, if you want to enjoy your own property, you can also opt to block off the dates for your enjoyment.

On the other hand, long-term rentals will have to charge tenants a certain fixed amount for the entire term of the lease. There isn’t much you can change after the contract has been signed by both parties.

Final Thoughts

Both short-term and long-term rental properties offer benefits to property investors. In the best scenario, you can manage properties that fit these two types to diversify your investments. However, if you’re just starting out, think about your investment style, your time availability, and your source of income when you make the final choice.

If you want to learn more about how to increase Airbnb revenue, work with us at BeyondBNB. Join our free training event where we’ll discuss effective ways Airbnb hosts can increase their earning potential by up to 112 percent. Claim your spot today to start your journey to Airbnb success!

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