Short-Term Rental vs Long-Term Rental: Key Insights for Property Owners

In addition to knowing your home will be well taken care of, long-term tenants offer the security of residual income. If you are able to reduce any overhead on your investment property, you can not only pay off the mortgage on the property itself but invest in a new property if you please! Real estate truly is one of the best investments to make.

What Is a Long-Term Rental

A long-term rental refers to leasing a property for an extended period, typically lasting six months or more. These agreements often involve residential homes, apartments, or condos. Renters commit to living in the property for a set time, with most contracts spanning one year.

Long-term rentals generally include fixed monthly payments, and tenants are responsible for utilities and maintenance tasks, depending on the agreement terms.

What is a Short-Term Vacation Rental

A short-term vacation rental is a property rented out for brief stays, usually ranging from a few days to a few weeks. These rentals are often fully furnished and cater to travelers seeking temporary lodging for vacations or business trips.

Examples include homes, apartments, and condos offered through platforms like Airbnb or Vrbo.

Unlike long-term leases, short-term vacation rentals typically include utilities, internet, and amenities as part of the rental cost, and rates may fluctuate based on demand and season. 

Advantages of Long-Term Rentals

Long-term rentals offer several advantages for both property owners and tenants:

• Stable Income: Property owners receive consistent rental payments, ensuring a steady cash flow over time.
• Lower Turnover: Tenants typically stay for extended periods, reducing the need for frequent tenant searches and the associated costs.
• Reduced Maintenance: Fewer tenant turnovers mean less wear and tear on the property, saving on maintenance and repair costs.
• Predictable Expenses: Tenants often handle utilities and basic upkeep, leading to more predictable monthly expenses for the landlord.
• Tenant Screening: Owners have the opportunity to thoroughly vet tenants, which can lead to better, long-term relationships and fewer issues.
• Less Marketing: Long-term leases reduce the need for constant advertising, saving time and money on finding new renters.
• Legal Protections: Formal lease agreements provide both parties with legal protections, ensuring clear expectations and responsibilities.

These benefits make long-term rentals a reliable option for property owners seeking stability and steady income.

Disadvantages of Long-Term Rentals

Long-term rentals have potential drawbacks that property owners should consider:

• Less Flexibility: Once a lease is signed, landlords have limited control over the property until the agreement ends.
• Lower Rental Income: Long-term leases usually generate lower monthly income than short-term rentals, especially in high-demand areas.
• Tenant Issues: Problematic tenants may cause property damage or fail to pay rent, leading to costly evictions and repairs.
• Maintenance Responsibilities: Some leases may require the landlord to handle ongoing maintenance and repairs, which can become expensive.
• Vacancy Risk: Landlords may face financial losses if the property remains vacant for an extended period between tenants.
• Legal Constraints: Evictions or changes to the lease often involve legal procedures, which can be time-consuming and costly.
• Limited Price Adjustments: Rent prices remain fixed for the lease, which can be a disadvantage if market rates increase during that time.

Advantages of Short-Term Rentals

Short-term rentals offer several key advantages for property owners:

• Higher Income Potential: Short-term rentals often generate more income than long-term leases, especially during peak travel seasons.
• Flexibility: Owners can block off dates for personal use, offering more control over when the property is available.
• Frequent Adjustments: Rental rates can be adjusted regularly based on demand, allowing owners to capitalize on market trends.
• Lower Risk with Problem Tenants: Since stays are short, issues with problematic guests can be resolved quickly without long-term commitments.
• Tax Deductions: Property owners may qualify for various tax deductions, including maintenance, utilities, and management costs.
• Shorter Vacancy Periods: Short-term rentals can have consistent occupancy in popular locations, especially during peak times.
• Frequent Maintenance Checks: Regular cleaning and inspections between stays help maintain the property’s condition, potentially reducing long-term maintenance costs.

Disadvantages of Short-Term Rentals

Short-term rentals come with several disadvantages for property owners:

• Higher Turnover: Frequent guest changes require more time and effort in managing bookings, check-ins, and check-outs.
• Inconsistent Income: Rental income can fluctuate based on season, demand, and market conditions, making earnings unpredictable.
• Increased Maintenance: Frequent guests lead to more wear and tear, and the need for regular cleaning and repairs between stays can add to costs.
• More Management Required: Short-term rentals demand more active involvement, from handling guest inquiries to managing reservations and maintenance issues.
• Regulatory Restrictions: Many cities impose strict regulations or restrictions on short-term rentals, which can limit availability or lead to fines for non-compliance.
• Higher Operating Costs: Utilities, internet, and amenities typically included in short-term rentals raise operating expenses compared to long-term leases.
• Vacancy Risks: During off-peak seasons, the property may remain vacant for extended periods, reducing income potential.

These challenges make managing short-term rentals more complex and time-intensive than long-term leasing.

11 Reasons Why Long Term Rentals Are Better Than Short

Do you want to cover the costs of the home you purchased in the Orlando area? I can share with you at least 11 reasons why long-term rentals are better than short-term rentals. I have been in the Kissimmee property management industry since 1991.

That’s the kind of experience that you can count on. I owned and operated my own short-term rental company from 1994 to 2004, and long-term rentals from 1996 to the present.

This gives me the experience and qualifications to talk on both these subjects and why you should consider these 1 reasons why long-term rentals are better than short-term rentals.

Why do Landlords Prefer Long-Term Tenants?

The answer is simple – mutual investment. If you are able to screen tenants successfully, you can enter into a partnership of mutual trust and respect with your tenant. In most cases, the tenants will make improvements to the home if needed, without sending you a bill! While this is not required, this would be a show of good faith and appreciation. As the homeowner, it is your duty to ensure that your home is in good order for the tenants who will be residing there.

In addition to knowing your home will be well taken care of, long-term tenants offer the security of residual income. If you are able to reduce any overhead on your investment property, you can not only pay off the mortgage on the property itself but invest in a new property if you please! Real estate truly is one of the best investments to make.

Overall, any cons that may come with renting your home can be avoided with effective tenant screening and a good relationship with long-term tenants.

11 Reasons Why Long-Term Rentals are Better than Short-Term Rentals

1. Long-term rentals are better than short-term rentals because your income is fixed for the entire year. You know how much you’ll be paid every month, which gives you a stable source of income.
2. Vacationers come and go and you’re at the mercy of the market. Pandemics, hurricanes, and all kinds of economic factors govern the popularity of vacationing in Orlando. Sometimes vacationers only stay a few days to a week. In the winter months, if you’re really lucky you’ll get a snowbird rental that will stay for six weeks or so, and they’ll pay a much lower rate. It’s rare you get enough rentals to pay your overheads. Long-term rentals are much more consistent. You could have the same tenants for years.
3. You don’t have to pay for utilities or phone bills or cable bills. These are all in the tenant’s name on the day of move-in when you have long-term renters.
4. In Florida, if your rental is for over six and a half months, you do not have to pay a sales or resort tax. But you are still responsible for your property taxes or HOA fees because they belong to the homeowner and not the tenant. Register your vacation rental for sales tax via this link https://floridarevenue.com/Forms_library/current/dr1.pdf
5. You don’t have to furnish your home with long-term rentals. You need your floor coverings and window blinds, but you don’t have to update your furniture every few years.
6. No one will call your manager at night for a light bulb or a blocked toilet. Long-term tenants do those things themselves.
7. No one will ask you for a refund because their vacation was ruined due to a hurricane
8. You won’t be asked to refund money because it rained all week and the pool couldn’t be used.
9. Tenants don’t expect a fix immediately unless it is an emergency
10. Ongoing or preventative repairs don’t have to be scheduled when someone isn’t staying at the property for vacation. This results in lower maintenance and ongoing costs. You also don’t have to buy new silverware, towels, and other things.
11. Insurance coverage is cheaper. With a long-term rental, someone is living there year-round. That provides a better break on insurance.

Should I rent my home to short or long-term tenants?

Regarding long-term property management in Orlando, FL, you might want to look at some of the city’s demographics. The Orlando metro area is considered one of the most desirable places to move to in Florida. Buying a rental property near Walt Disney World will attract people to Orlando for family vacations.

The mild weather in Winter from late November to March is popular with the snowbirds. If you haven’t heard this term before, this applies to retirees that want to escape the northern winters and spend a few months in the sunshine state. If you’ve bought a vacation rental property and are retired, this type of rental would suit you when you want to use your rental property in the Winter months.

Most vacation rental homes stay busy during school holidays, generally from Easter to September. If you use your home outside of this period, it’s a win-win for you if you can pay cash for your home, all the better, as having no mortgage lowers your running costs.

Short-term tenants can bring in quick income and have more expensive running costs. Long-term tenants can provide a steady income, and a family lives there year-round. This makes your home a true investment property. Some people consider buying an investment home and using it as a long-term rental with the hopes of retiring to Florida one day and living in their home seasonally or year-round.

Think about your family’s needs and preferences. How many properties do you own, and what kind of properties are they? For example, you might own several homes in Orlando, Kissimmee, Davenport, or Clermont you might have a mixture of long- and short-term rental properties. In this situation, you should hire a professional property manager to look after your investment properties.

Long-Term Rentals Near Me

We have been doing long-term rentals and property management in Kissimmee since 1996, so we have a unique perspective on both types of rental. This is why I feel it would benefit you to know why there are 11 reasons why long-term rentals are better than short-term rentals. Check out our article on vacation home renting https://propertymanagementkissimmee.com/vacation-home-rental-kissimmee/

Now that you have seen these 11 reasons why long-term rentals are better than short-term rentals, call us to find out even more reasons why you should make the switch. We’ll walk you through the process and let you know how much more money you could be putting in your pocket by bringing your home to us so we can rent it out for you as a long-term rental.

If you need further information about Kissimmee, Orlando, or Davenport long-term rentals and property management, please don’t hesitate to contact us at McCormack Realty & Renters Choice Homes. Better yet pick up the phone and call us at 407 933 2367 or in the UK at 0161-300-9595. Your inquiry is confidential, and solutions to your problems are just a call away.