Short-term rentals have been getting popular recently. As a Manhattan Beach rental property owner, you may have looked into buying or converting one of your properties into a short-term rental. Short-term rentals may work perfectly for some, but for some investors, it is too much work. Before making any move, do your homework and examine the pros and cons of owning a short-term rental property.
The main advantage of short-term rental property is its potential for generating a higher rental income. Short term rentals trump long term rentals in terms of per day earnings. In an ideal situation, when the guest leaves and somebody moves in right after, your property can earn more, than a long-term lease. Short-term rentals let you increase prices at times of high demand, allowing you to maximize your profits.
With a short-term rental property comes great flexibility! You have the option to rent your property for a week or for a month at a time. If your rental property is in a nice vacation spot, vacancies mean a personal getaway for you! Then there is the convenience of rental platforms like Airbnb and by using this service, you can say goodbye to leases if you list your property there. Switching your property back to a long-term lease is not an issue at all as you can easily remove your listing from these sites anytime.
On the other side of the fence, there are a few drawbacks to owning a short-term rental. Cash flow may be fast but its drawback is it has less stability. Most short-term rentals experience seasonal fluctuation which means your property could be empty and generating no income for you. Not ideal at all. Marketing strategies can help but there are forces that can topple our best-laid plans. Short-term rentals are very sensitive to economic conditions, and economic downturns often result in less demand. For example, you may have noticed that the short-term rental market has suffered a lot this year due to stay-at-home orders and travel restrictions caused by the pandemic.
One more disadvantage of short-term rentals is the higher costs that come with them. Stocking on essentials is part of a short-term rental. Furthermore, if you want your property to be competitive, you need to invest in furnishings and décor. You should not forget to provide your tenants with things like linens, toilet paper, pots and pans, and more. These items will need to be re-stocked between tenants which over time translates to higher expenses.
For a short-term rental, there will be more cleaning and maintenance. What’s more, if you’re preparing the place for the next tenant by yourself, it would require a lot of your time. You could hire someone to do it for you but it would prove to be expensive especially if your property is in high demand. It is imperative that your place must be cleaned between tenants and maintenance and repairs are done at the right time. Miss this part and you could get bad online reviews. It’s the last thing you want to experience in this business as it translates to fewer bookings in the future.
Finally, it’s better to be informed by checking state and local regulations on short-term rentals. Some cities and homeowners’ associations have strict regulations or are not allowing short-term rentals. Just because a restriction is true in one neighborhood does not mean it is also true in another. So do your research first before converting your property into a short-term rental.
If a longer-term Manhattan Beach rental sounds more stable and profitable for you, contact Real Property Management California Coast. You can contact us online or call us at 310-535-2150.
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