May 18, 2017

Would You Rather Short or Long-Term Rent your La Jolla Vacation Home?

May 18, 2017

Would You Rather Short or Long-Term Rent your La Jolla Vacation Home?

If you're just starting out in the property management business or are in a place where you want to mix things up a bit, you may want to consider the differences between owning a long-term rental and a short-term rental. At face value, that question may seem easy to answer. It's a matter of deciding whether you want to be a landlord serving tenants or more of a hotel manager serving guests. In reality, however, there are many decisions, details, advantages and disadvantages to each side of the equation.

Short-Term Rentals

As technology has infiltrated every aspect of our lives, the short-term rental market has accelerated at an astounding rate. Not only can major chain hotels and tiny bed and breakfasts now reach the corners of the short-term rental market, but the average person with an extra bedroom can do the same. As a result, this market is increasingly competitive and tight for the property manager of a La Jolla vacation home. 


Responsibilities to Guests

Property managers opting to capitalize on the short-term rental market need to focus on the guest's experience. In most cases, you're serving the individual or family on vacation. They are looking for rest, relaxation and no worries when they book a La Jolla vacation home. To be successful in this market, then, you need to pamper guests and provide all the necessities as well as extras that are not expected but much appreciated.

Renting an apartment or a home on a daily or weekly basis puts you automatically one step ahead of conventional hotels, simply because you offer sought-after amenities like kitchens and more space. However, you may want to consider furnishing a short-term rental with extra comfortable couches, in-home entertainment systems, and flexible sleeping furniture such as futons, trundle beds, bunk beds or cots.

Going above and beyond the call of duty by providing things like board games, video game consoles, kitchen gadgets and machines, or cribs and high chairs can make your property stand out.

Advantages of Short-Term Rentals

La Jolla property owners who opt for short-term rentals can often charge a premium when hosting a guest for a day or a week. Those on vacation as well as those on business trips have the resources to pay well for accommodations that are in the right location and provide what they need.

If you happen to own a property in a popular vacation spot like the La Jolla and San Diego areas, you may be able to charge even more during high-demand seasons. Some property owners have found that they are able to earn more by renting out their properties for three busy months on a short-term basis than by renting the same unit for an entire year as a long-term rental.

Short-term rental contracts also mean that you reserve the right to use your property as well, giving you the flexibility to enjoy your own property for vacation or offering it to friends and family as you desire. In addition, many state laws allow you to simply ask a disruptive or destructive guest to leave.

Disadvantages of Short-Term Rentals

The main disadvantage of owning short-term rental properties is the amount of time it can take to manage multiple guests on an ongoing basis. Each guest may have questions, payment issues, reservation changes, problems or other special needs that you will need to handle or have someone handle on your behalf. Your La Jolla property also needs to be cleaned, restocked, maintained and inspected at a much higher rate for short-term rentals.

Depending on the location of your property, you may also need to invest more time in marketing and advertising to ensure that you keep your unit booked as much as possible.

Long-Term Rentals

Property managers that are working with long-term rentals typically own homes, condominiums or apartments that carry leases of at least six months and up to several years. Instead of working with guests, you're really working with tenants that will be responsible for the day-to-day cleaning and care of your property.

Responsibilities to Tenants

As the owner and landlord, you have some basic responsibilities as specified in your lease agreement. In most cases, this includes things like ensuring that major systems such as heating, ventilating and air-conditioning units remain in working order and that major appliances are provided, repaired or replaced as needed with regular use.

In some cases, you might provide major pieces of furniture or regular yard service like mowing the grass as well. Some property managers leave those responsibilities as well as daily cleaning and upkeep to the tenants themselves.

Advantages of Long-Term Rentals

The number of interactions with your tenants will be significantly lower than with guests staying at a short-term rental. Once you've agreed to lease terms and length and all paperwork is signed, you can ideally sit back and collect your monthly rent checks.

If you are fortunate to have responsible tenants and a relatively new property, maintenance issues and tenant problems can be significantly minimized.

Disadvantages of Long-Term Rentals

Although the ongoing time commitment may be lower with long-term tenants, the upfront time investment can be significant. Since you'll be entering a long-term agreement with a tenant who will need to be trusted to, at a minimum, not destroy your property, you'll want to conduct significant amounts of background and reference checks. In addition, this tenant will owe you a significant amount of money over the course of a lease, so you'll want to ensure that they are financially stable and likely to meet their financial obligations.

If you find yourself in the unfortunate situation of having troublesome tenants who cause problems, destroy property or fail to pay rent on time or at all, the process of evicting them can be costly, lengthy and difficult.

In some states, laws and regulations may be complex regarding equal housing opportunities and what you may need to do in order to comply.

Whether you decide to offer your property as a short-term vacation rental or a long-term solution for someone seeking an apartment or home for several months or more, you can maximize the advantages and minimize the disadvantages by working with a qualified property manager.




Tagged: vacation rental investment