When you invest time and money into a rental property, the main goal is to get the best possible return on your investment. Both vacation rentals and traditional long term rentals can be lucrative. 

Deciding on which rental strategy to pursue takes an understanding of the differences between short term rental vs. long term rental. Each has its own unique benefits and challenges. We’ve gathered a list of aspects of rental ownership to consider that can help you make the most of your property’s earning potential.

Short Term Rental vs. Long Term Rental—Factors to Consider

A short term rental is considered to be a property rented anywhere between one night up to one month. Some sources extend that description to 90 days. Long term rentals typically have a lease extending for an entire year.

Short term rentals or vacation rentals have become an attractive alternative to expensive hotels in vacation and tourism destinations. Visitors have the comforts of home while they enjoy local attractions and culture. 

A long term rental, on the other hand, is home to its occupant. Tenants become part of the community and may choose to stay year after year.

When deciding which kind of investment is right for you, consider:

• Location
• Whether or not you will want to use it yourself
• Marketing
• Maintenance
• Tenant Relations
• …and of course, Profitability

Location

The location of a rental property alone can be a big factor in the owner’s rental strategy. Apartments, condos, and houses near the beach or in other tourist-friendly parts of Miami, for example, do great as vacation rentals. Those near financial or tech hubs and in more residential neighborhoods might be more suited to long term tenants.

Owner’s Use

One of the biggest benefits of owning property in a vacation destination is being able to enjoy it yourself. Florida is known for its “snowbirds” who flock to the area from northern states during the winter. When the home is a vacation rental, it’s easy to reserve it for personal use, or to block out dates for friends or family. Using the property is out of the question when renting long term.  

Marketing

Good marketing is essential for both short and long term rentals to reduce vacancies. Marketing a long term rental is really only necessary when a tenant moves out. But for short term rentals, the marketing is constant…and a bit more complicated. 

• Vacation listings must be updated frequently on rental platforms like Airbnb, VRBO, or independent websites.
• It’s essential to price the property competitively, and pricing fluctuates based on the season, holidays, and local events.
• Marketers often need to be creative to make their vacation properties stand out from all the others by highlighting amenities and even offering promotional discounts and packages.

Hiring a property management company is often the best way to effectively attract a steady stream of visitors to a vacation rental. 

Maintenance

In some ways, it’s easier to keep up with repairs and maintenance with a short term rental. After each guest, the property gets a professional cleaning and inspection allowing owners to notice and fix things more promptly. On the other hand, long term renters might take better care of the property, since it is their home. A guest who is only there for a few days or a week may not feel accountable for leaving a mess or damage behind, resulting in more wear-and-tear.

Scheduling larger repairs or renovations can also be easier with a vacation rental. Owners can block out time to keep the rental empty while the work is done. The same type of project would need to be coordinated with the occupants of a long term rental to create as little disturbance and inconvenience as possible.

Whether long term or short term, emergency maintenance needs to be available 24/7. This fact alone convinces many owners to work with a property management company.

Tenant Relations

When doing long term rentals, it’s routine to do a financial and criminal background check. Still, you can end up with problem tenants who damage the property or don’t pay rent on time. With short term rentals, frequent turnover avoids the issue of being “stuck” with someone for an extended period of time. However, the lack of any type of approval process makes it difficult to weed out bad guests at a vacation rental.

If things go wrong with a short term tenant, they will likely be gone soon. Problems with a long term tenant may result in an expensive and time-consuming legal dispute.

Communication is key with renters of both types of property. For short term rentals, it’s important to make rules and expectations clear and be available for questions. Communication between landlords and long term renters is more about building a good relationship where both parties can interact well throughout the duration of the lease. 

Profitability

Long term rentals offer a guaranteed, steady income, but short term rentals provide better cash flow. Even with seasonal fluctuations, vacation rentals charge a higher nightly rate. As long as occupancy rates are consistent, short term rentals tend to provide more rental revenue in the long term.

Expenses, on the other hand, are greater for short term rentals. The following things are necessary with vacation rentals but rarely, if ever, come up for long term rentals: 

• Cleaning and laundry with each guest turnover 
• Handling listings and price optimization
• Managing bookings and key exchange
• Providing, staging, and maintaining furnishings
• Supplying linens and kitchen equipment

These costs can put short term rental vs. long term rental on a more equal footing when it comes to profitability. It is essential that these services are provided in the most economical and efficient way to maximize the owner’s profit.

Short Term Rental Management Services

Providing rental management services is exactly where Miami Residences Management Vacation Rental comes in. Partnering with MRM allows you to maximize the return on your investment by putting us in charge of the entire rental process.

In addition to the services listed above, a professional investment property management company like MRM provides licensing, account management, and financial reporting. Our aim is to keep you well informed and compliant with all legal and financial aspects of your property.

Owning a Vacation Rental vs. Being a Landlord

There is a reason for the huge number of owners that have listed their properties in short-term rental platforms like Booking, Airbnb, and VRBO. Short term rentals can be lucrative while offering freedom and flexibility. 

For those who don’t mind being landlords and maintaining a long term relationship with individual tenants, long term rentals might be the option to choose.

Regardless of the strategy you choose for your rental property, choosing an experienced, reliable property manager can make all the difference. MRM has the expertise to safeguard your investment while providing the highest level of professional service. Your renters will enjoy an exceptional, luxury experience, no matter how long they stay.

Contact us today to discuss your rental property goals.