Why short-term renting isn’t always better than long-term renting

Short-term rentals are all the rage right now. They’ve taken the world by storm, and many people find themselves being seduced by the allure of “easy” money – and a whole lot more of it than you’d find in traditional renting.

But it’s important to remember that there is another side to the coin.

There are some big advantages to longer-term renting that many people seem to gloss over. One of the biggest is that long-term renting is virtually guaranteed. You sign a contract with someone for a year or two and, providing you’ve vetted them properly, you get the same amount of money every month for the next year or two. Easy as that.

Short-term rentals are not so simple. Depending on where you are, the supply of short-term rental (and thus competition you have to beat out) might be incredibly high.

You’ll have to compete with low prices and work a lot harder to keep bad guests out.

You might have more pushback from the neighbors, too, who are often much more uncomfortable with having a constant stream of strangers coming through than they would be with a traditional renter.

Yes, short-term rentals offer the potential to make several times more than you would with a traditional long-term rental.

But there is something to be said for guaranteed income, a known market, and placating the neighbors.

With short-term stays, you are never guaranteed to get the next booking. You’re never guaranteed to have a good guest – even if they have good previous reviews. You’re never guaranteed to have understanding neighbors – even if the HOA allows short-term rentals, the neighbors can still make your life miserable.

It’s true that there’s often less wear and tear on your house with a short-term rental….but that’s only assuming you don’t get a bad guest who ends up trashing your house.

This is not to say you shouldn’t do it. Many people have done it and have been very successful at it.

But if you’re considering starting a short-term rental – either a brand-new listing or converting an existing long-term unit to short-term stays – make sure you do your research before jumping in all the way. Because at the end of the day it’s not as simple a calculation as many people make it out to be.

And if you make the calculation wrong you could be out thousands of dollars and a whole lot of headaches.