As a rental property owner, you may wonder which is more beneficial for you: long-term or short-term rental. From the perspective of a rental property management company, both can be beneficial – it just depends on your needs and goals.
For our purposes, we will define short-term as anything under one year, and long-term a year and over. The primary objective remains however, getting the best possible return for your investment.
Advantages of long-term rental properties:
Consistent Income – Due to yearlong leases, long-term rentals will result in a consistent flow of monthly income and will not generally be affected by seasons or slowdown in the economy. This adds a level of stability that you may not necessarily get with short-term rentals. If you are fortunate in finding good tenants, building and maintaining a good relationship with them will help in keeping them at your property for a very long time. A good Property Management company is key to that relationship.
Easier to Manage – Managing a long-term rental means lower advertising costs, less hassle of dealing with frequent tenant turnover and less time in upkeep and maintenance. Your Property Management company takes care of the rental on your behalf so you can focus on your job and enjoy your monthly returns from your investment.
Utilities – With long term rentals, tenants are responsible for paying for their own water, hydro and heat as compared to short-term rentals, where most times these cost falls to the Landlord.
Less Management Fees – Again due to less turnover, maintenance and marketing requirements, property management fees would be less for long-term rentals.
Basic Maintenance – Long-term tenants tend to take care of minor maintenance issues/repairs themselves even though the responsibility may fall to the owner. This is not only convenient but helps save time and cost.
Advantages of short-term rental properties:
Income Potential – With short-term rentals, you are not tied into annual leases and have the flexibility to increase prices depending on market trends. It is also makes it much easier for the owner should they wish to sell the property or retain it for their personal use. Long-term rental properties are also subjected to rent increases dictated by the Land and Tenant Board which are usually very negligible.
Tenants – You are also not locked into the same tenant for any lengthy time. Even though Landlords and Property Managers undertake a vigorous screening process to find the “right” tenant, you can never be 100% sure if that tenant will end up being the right fit. And with the law tending to favor tenants, it can be very difficult, expensive and time-consuming to free yourself from “bad” tenants.
Upkeep – Long-term renters create more wear and tear on the property for example: appliances. With short-term rentals, it is easier to keep up with repairs as the property has to be inspected more frequently so maintenance issues can be picked up before they get too serious.
Still not sure what kind of rental term is right for you? Contact ACCL, a professional rental management company, and let’s discuss your options and their benefits, for residential and apartment rentals.