The benefits of a long term rental
Renting a holiday home on a short term basis is usually seen as the most profitable and suited option. But is it worth considering long term rental? Below we have listed four benefits associated with long term holiday rentals.
A Steady Revenue Stream
Property owners can apply higher nightly or weekly rental rates in short term lets to offset low occupancy levels at certain times of the year. But even in the most popular tourist destinations, low season can be slow. Long term rentals guarantee a steady source of income when occupation is typically low. Moreover, it is increasingly easier to find tenants during the off season. Given the growing amount of location-independent and freelance / remote workers looking for accommodation with affordable rental rates all-year round.
Short term rentals require time and effort in terms of upkeep and housekeeping. Most of the times, the check-in and check-out process and key handovers require someone to be present. In some cases it is necessary to hire staff, such as property managers, or cleaners. These tasks can turn the property upkeep into a full-time job during peak season for all involved.
In contrast, long term rental guests are responsible for cleaning and related tasks, so owners can have more freedom and aren’t tied to the property or area.
Peace of Mind
Long term rentals usually entail a higher level of tear and wear, since appliances and furnishings are used on daily basis for long periods of time. However, it is common practice for long term rental contracts to require a security deposit or insurance covering potential damages, and to request references or a credit check for the owner’s peace of mind. This may seem more time consuming but it avoids problems in the long run.
Fewer Tax And Advertising Expenses
The short term rental market is very competitive, especially in high-demand areas. This means owners need to pay for the fees and commissions associated with property marketing or advertising. On the other hand, longer rentals require less advertising. Guests may become repeat tenants year after year, which may cut advertising expenses even further. In some countries vacant properties can be heavily taxed, even if they are only empty for part of the year. Taxes could eat away at profits, which makes renting the property on a long-term basis more appealing. In the UK, furnished holiday homes that are rented for 155 days every year may qualify for tax relief , and in some cases, property owners can also claim capital allowances over the costs of furnishing and equipping the property.
To sum up, long term holiday rentals can be an effective way of generating a positive cashflow and helping property owners reach their financial goals. With the right booking and management system, this option can be just as beneficial as its short term counterpart.