Perhaps you have just made an additional property purchase with the intention to let it out and earn a rental income. You may be wondering what the best option is for you when it comes to letting out your unit; do you opt for short-term options or go the traditional route with long-term rentals. Both short and long-term rentals have their advantages and disadvantages.
With the rise of accommodation hosting platforms like Airbnb, virtually anyone can earn an income by letting their property out. Short-term rentals can be a day or as long as a month. This type of rental option is attractive to both holidaymakers and business travellers as it allows for flexibility when it comes to the length of stay, and often can be managed through any number of booking platforms. Although you may be able to command a higher rental rate, it comes with a host of risks and requires ongoing management and maintenance from you as the owner. Short-term letting allows you to have greater flexibility with your asset and ca also be used for a personal purpose when and if needed. The risks associated with this kind of rental is that you may have fluctuating occupancy rates and therefore your rental income may not be stable. Additionally, your initial capital outlay may be steep as you will have to furnish and equip the property, so it is ready to live in. Gearing the property for rental will include the purchase of big-ticket items like televisions, fridges, air conditioning and security systems. There will also be ongoing costs involved, which include regular maintenance, upgrades and repairs and also cleaning of the property between bookings.
Although your rental return may be lower than letting your property out short-term, there are fewer risks associated with this type of option. You will have a stable monthly rental income and more security in knowing you have a legal contractual agreement in place with your tenant. It pays off to find a good tenant who will treat your property well even if it means a lower rental rate. One of the risks associated with this kind of rental is a tenant who stops paying their rent. It is best to ensure that your tenant vetting process is thorough and that the clauses in your lease protects both you and the tenant within the bounds of the law.
Renting your property out, whether on a short or long-term basis can be a daunting and confusing process. The role of a rental agency is to take the guesswork out of the process and to ensure tenants are financially vetted and a legally binding lease is in place. A good rental agency acts on your behalf and in your best interest, while managing all the elements. A rental management agency, like the team at Lush, will list and market your property and help you to keep your occupancy rates high and rental income stable.