If you are a real estate investor you may have wondered if a long term rental is better than a short term vacation rental. Both have their benefits and drawbacks, and I will explain a few of those items. Long term rentals are usually properties that are rented for a year or longer to one tenant. Long term rentals have a fixed income rate and are generally stable and predictable. You will not be raising rental prices until after the term of the lease ends but you will know what to expect each month. In long term rental agreements you can negotiate to have the renter pay for minor repairs, utilities, and HOA fees. The main benefit to long term leases are that they are very predictable and require a little less of your attention. Short term leases, also known as vacation rentals, are generally rented out in shorter increments. There are many people coming in and out of your property which requires more of your attention, will result in more repairs, and the owner will be responsible for most of the maintenance, utilities, HOA fees and so on. There is the potential to earn more each month than long term leases due to the fact that you can raise rates anytime. Some areas of the country are high tourist areas and the property may rent out most of the year. Other areas may only rent out seasonally. These are things to consider. Vacation rentals can also be used by the owner while the rental income is paying for the expenses. There are many things to consider before deciding.
