Navigating the Pros and Cons of Short-Term Rental Ownership

Owning a short-term rental property in Orlando can be a great investment opportunity because the city is a popular vacation spot known for its theme parks and attractions. However, it’s important to keep in mind that with the potential for high demand and consistent occupancy, there are also potential drawbacks to consider.

For example, short-term rentals can be more demanding for landlords as they may require more frequent cleaning and maintenance between guests. Additionally, there are also local regulations and laws to keep in mind, as well as tax implications that may not be as present in long-term rentals. Hence, it’s vital to weigh the pros and cons before making the decision to invest in a short-term rental property. To save you a bit of hassle, we’ve compiled the following information that everyone should know, so let’s get started!

Why Short-Term Rentals can be a Lucrative Investment

High Revenue Potential

When it comes to real estate investing, maximizing return on investment is key. Short-term rentals can provide a significant boost in earnings compared to long-term rentals. In fact, the rate for a short-term rental can often be 2-5 times higher than a long-term rental. For instance, a property that goes for $1,000 per month as a long-term rental may earn anywhere from $2,000 to $5,000+ per month as a short-term rental.

Customizable Options

Owning a short-term rental gives you the freedom to make your own decisions. Property owners can adjust nightly rates based on the time of year, property type, and city demand. They can also set minimum-night stays for high-demand dates such as weekends, holidays, and special events. For example, in Orlando, rates may be higher during tourist season. And perhaps the best part is that owners can block off dates for personal use, where you cannot with a long-term rental.

Minimizes Property Damage

Frequent turnover of renters can actually have an advantage for property owners. With short-term rentals, small repairs can be addressed immediately before they turn into larger issues. Moreover, with a cleaning crew visiting the unit every few days, it’s easier to keep an eye on the property and address any problems as they arise. Of course, this doesn’t guarantee that tenants will take care of the property, but it does provide more control over cleaning, preventative maintenance, and damage mitigation.

The Cons of Owning Short-Term Rentals

Limited Control Over Tenants

With short-term rentals, there’s often less control over who is renting the property. Unlike long-term rentals, there is no standard screening process for short-term renters, leaving landlords to rely heavily on online reviews and reputation. This can be a concern for landlords as there is a greater risk of property damage or other issues when you have little control over who is renting your property.

Unpredictable Income

Short-term rentals are more susceptible to seasonal vacancy, last-minute cancellations, and market saturation, making it difficult to predict how much income you can expect to earn. The COVID-19 pandemic has also highlighted the unpredictability of the short-term rental market, as demand for vacation rentals plummeted and put many owners out of business. Yet, please keep in mind that the pandemic was a one-off event which presented extreme circumstances.

It Takes Time and Dedication

Managing a short-term rental can be a lot of work. Hosts need to handle check-ins and check-outs, answer guest questions, ensure the property is clean and stocked between reservations, pay utilities, and address repairs. All of this can be very time-consuming and can quickly become a full-time job. It’s also worth noting that some property management companies have less experience with short-term rentals, so landlords may have to take on more responsibilities than they would with a long-term rental.

Let’s Discuss Your Short-Term Rental

Investing in a short-term rental in Orlando can be a smart move for anyone looking to maximize their return on investment. With the ability to charge higher nightly rates and the flexibility to adapt to changing market conditions, short-term rentals can be extremely lucrative.

However, managing a short-term rental can also be time-consuming and unpredictable. That’s where a property management company like ours comes into play. We can handle the screening of renters, ensure your property is always in top condition, and help you navigate the ever-changing market. By hiring us, you can enjoy the benefits of owning a short-term rental without having to worry about the stress. Contact us today to learn more about how we can help you make the most of your investment.