Short-term rentals can be a great income stream — and they’ve been popular with travelers for years.
They can be a viable alternative to traditional rental properties, especially for less-experienced investors who don’t want to be full-time landlords (but still want regular cash flow).
But as with any investment, they’re not completely without risk, and you should weigh your options carefully. Before you decide, take a look at some pros and cons of short-term rental investing.
Pros
- More Money: Vacation rentals often command higher prices than long-term rental properties, particularly if they’re located in vacation hotspots.
- Passive Income: Running short-term rentals can be pretty hands-off, especially if you hire a cleaning crew and property manager.
- Tax Perks: Since the property is a business, you can write off a lot of the expenses on your tax returns.
Cons
- Operating Costs: Unlike traditional rentals, you’ll need to furnish the property. It will also have to be cleaned between each visit, and toiletries and other important items need to remain stocked for all guests.
- Financial Qualification: Loans for investment properties usually have stricter requirements than those for primary residences, including down payments, credit scores and other financial factors.
- Potential Volatility: There’s no guarantee your short-term rental will be booked constantly. Vacation demand may ebb and flow, particularly in more seasonal areas.
Think a short-term rental could be a good investment opportunity for you? Get in touch today to begin your search.
