The idea of short-term rentals has risen in popularity during these past few years. As a Waukesha rental property owner, you may have looked into buying or converting one of your properties into a short-term rental. There are property owners who swear by short-term rentals, but other investors find the hassles that come with it are not worth their time. Before you make a decision, weigh the pros and cons of owning a short-term rental property.
The main reason for going into the short-term rental property business is its potential for generating higher revenue. Short term rentals gain more money on a daily basis compared to long term rentals. So your property can earn more than a long term lease, provided tenants are always available. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
With a short-term rental property comes great flexibility! You can choose to have your property rented a week or a month at a time. If your rental property is in a nice vacation spot, vacancies mean a personal getaway for you! Then, do away with the hassle of leases by setting up your property on rental platforms like Airbnb. Switching your property back to a long-term lease is not an issue at all as you can easily remove your listing from these sites anytime.
But it’s not perfect since there are a few drawbacks to owning a short-term rental. It’s true that it rakes in cash but this is not stable. Most short-term rentals experience seasonal fluctuation which means your property could be empty and generating no income for you. Not ideal at all. Marketing strategies can help but there are forces that can topple our best-laid plans. Short-term rentals are very dependent on economic conditions, and economic downturns often result in less demand. For example, you may have noticed that the short-term rental market has suffered a lot this year due to stay-at-home orders and travel restrictions caused by the pandemic.
It is also important to note that short-term rentals incur higher costs. Stocking up on essentials is part of a short-term rental. For your property to be competitive you would need to have nice furnishings and décor. You should not forget to provide your tenants with things like linens, toilet paper, pots and pans, and more. These items will need to be re-stocked between tenants so your expenses will pile up over time.
For a short-term rental, cleaning and maintenance is a very big factor. What’s more, if you’re preparing the place for the next tenant by yourself, it would require a lot of your time. You could hire someone but this will also prove to be expensive especially if your property is in high demand. It is very important that you clean between tenants and maintenance and repairs are done on time. Otherwise, you could get bad online reviews and thus suffer fewer bookings in the future.
Finally, it is a good idea to inquire about state and local regulations on short-term rentals. Some cities and homeowners’ associations have different regulations for short-term rentals. Just because a restriction is true in one neighborhood does not mean it is also true in another. So do your research first before converting your property into a short-term rental.
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