Short-term rental activity has rebounded in 2023, despite a significant decline at the beginning of 2020. In reality, the occupancy rate for vacation rental units in the United States hit 61.6 percent in April 2023, the highest number in the country’s history.
More and more people are becoming interested in getting into the short-term rental sector to realize the benefits of doing so. But what is the difference between short-term rental management and long-term rental management? And is that the best course of action for you to take?
If you want to learn more about whether starting a vacation rental property management company is a good idea for you and how to expedite the process of managing your vacation rental properties, keep reading.
What Is the Definition of Short-Term Rental Management?
Brief-term rental management is the supervision and administration of properties that are rented out for a short period. Managing these rentals entails a large list of daily responsibilities that include operations such as cleaning, handling check-ins and checkouts, maintenance, guest communication, marketing, and so on.
In a nutshell, the primary purpose of short-term rental management is to ensure that the business operates smoothly, that guests have a five-star experience, and that your return on investment (ROI) rises.
When it comes to property management, what’s the difference between short-term rental management and long-term rental management?
It is the period for which the properties can be rented out that is the most significant distinction. Short-term rental management is concerned with properties that are rented out for a short period, usually a few days.
A further significant distinction is the type of property that is rented out. A short-term rental property’s location is good because it is in a popular neighborhood that is often close to the city center.
Finally, it is more labor-intensive than long-term rental management, which is another difference. It is not only necessary to devote more time to responsibilities such as marketing and guest communication, but the expectations of short-term rental guests are also higher.
They anticipate that the resort will provide the necessary amenities, such as linens, towels, and other similar items. The expectations for the overall condition of the property itself are also higher than they were in previous years. Guests staying in a short-term rental home expect the property to be modern. In most cases, a property that needs refurbishment does not perform well as a short-term rental.
When compared to traditional property management, what are the advantages of vacation rental management?
When you compare vacation rental property management to typical rental property management, you will notice that both systems have their own set of advantages and disadvantages to consider. A few of the most tempting advantages that short-term rental management can provide you are listed below.
1. A higher return on investment
Vacation rental management can generate higher returns on investment if a property is in an excellent location and provides all of the amenities that travelers demand. However, to get this increased return on investment, you must maintain a high occupancy rate, which necessitates expert management.
2. Increased freedom and control over your living arrangements.
Property owners that use vacation rental management can block out specific dates on their calendars for their tenants. These dates can then be used for personal purposes, such as staying at the vacation rental yourself or inviting friends and family to relax at your home away from home.
In addition, because the property is occupied for shorter periods, property owners will have more opportunities to inspect it during that time. This will make it easier to detect and resolve any concerns that may arise about your accommodation in a timely fashion. In addition to giving you greater peace of mind, it can also help to avoid a minor issue from becoming a huge restoration project.
3. Vacation rental networks protect the hosts of vacation rentals.
Your house regulations, as well as the guidelines of the vacation rental platform, such as Airbnb or Vrbo, will provide you with the protection you require. If you have a problem with a guest, you can simply contact the platform through which they booked their stay, rather than resort to a lease agreement and the courts.
If you believe that you require more protection, you can always enter into a holiday rental agreement with the property owner. This is a written agreement between the host and the guest that outlines the terms and conditions of the reservation. An informal lease agreement is a smart approach to protect both parties from any misunderstandings, and it is far simpler to draught than a conventional lease agreement.
What Are the Disadvantages of Vacation Rental Management Over Traditional Rental Management?
While short-term rental management can result in a higher return on investment, it also entails higher costs and demands more effort. Before you dive in headfirst, here are a number of the most significant drawbacks that you should be aware of and be prepared to deal with.
1. There is more hassle.
Because the turnover rate is so much higher with short-term rental rentals, there will be more work to be done to ensure that the property is ready for the next visit before the next guest arrives. Furthermore, to ensure that there is a future visitor, you will have the additional task of marketing your rental property. Writing property descriptions and conducting evaluations are just a few of the numerous duties that must be accomplished if you want to be successful and prosper in the business when compared with traditional renting.
2. Your income may be affected by seasonality.
The money provided by holiday rental properties is often only available during certain seasons. To predict how many reservations will be made from one month to the next, various elements, such as events and attractions, must be considered.
3. There are severe restrictions and regulations for short-term rentals, which you may have to adhere to.
Some localities have extremely tight restrictions and regulations regarding short-term rentals, while others may outright prohibit them. Consequently, before entering into any contracts, you should conduct due diligence and research on the applicable laws in your jurisdiction. If you are unable to find a short-term rental choice in a certain city, you may always explore studying the long-term renting alternative.
4. higher Expenses
As previously stated, short-term rental management must accommodate an increasing number of guest requests. You will need to provide more facilities and things, which will need to be restocked or replaced when they become used or worn out. Furthermore, unlike traditional rental management, you’ll be required to clean your rental after each booking, which differs from the norm.
Utilize a great property management software to make the process of being a property manager easier.
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