Vacation rental management is definitely our sweet spot, so I am happy to do long-term rentals, but Airbnb is better. That does not mean short-term is automatically the right strategy for every property. It obviously depends on the property.
The way I would look at it is what the property can actually earn after the work and costs, not which strategy has the biggest number at the top of a spreadsheet.
The three rental types
Short-term
Nightly stays
More upside and a lot more moving parts.
Mid-term
30+ day stays
Furnished, but with fewer turnovers.
Long-term
Annual leases
More predictable and usually less work.
Short-term rentals
With keeping up with bookings, cleanings, amenities, repairs, and cash flow, you may quickly get overwhelmed if you do not have systems in place. Short-term rentals have a lot more moving parts than traditional long-term rentals. You want to make sure you have a plan for when something goes wrong, know precisely how much money is going in and out, and have a marketing plan to keep the guests coming.
Research the real estate market in your location and rental needs in your area so that you know who to market your space to. For instance, some spaces are more suited for couples and a romantic getaway, while others are more family-friendly. Some spaces make a perfect home base for outdoor adventurists, while others appeal to those traveling on business trips. Once you know your target guests, it will be much easier to create a marketing plan to find them.
This is the strategy with the highest ceiling in the right Airbnb market. It is also the one where bad pricing, weak marketing, missed cleanings, or local regulations can change the result the fastest.
Mid-term rentals
Mid-term is typically a furnished rental for 30 days or more. Traveling nurses, corporate relocations, military assignments, and insurance housing are common sources of demand. There are fewer turnovers than an Airbnb, but the owner can still get a furnished-rental premium over a normal lease in the right market.
This is probably the strategy people forget to consider. It can work where short stays are restricted, or it can fill a slower season between stronger short-term months. It still needs furniture, utilities, marketing, and cleaning. It is not magically passive; it just sits between the other two models.
Long-term rentals
Property managers often have to perform house cleaning and maintenance work. The most significant task in this regard is the turnover process. However, the long-term rental turnover process differs from short-term ones in several ways.
For instance, short-term rentals are time-sensitive, meaning the checkout and check-in process happens on the same day. But for long-term rentals, there are usually several days or weeks between one tenant leaving and the next coming in. In long-term rentals, the term “move-out date” is more common, and the lease agreement usually predetermined the move-in and move-out dates.
Although some things can be quicker for apartments, turning over a long-term rental property takes a few days. So, it’s unlikely that a property manager will have to turn over a property on the same day in the long-term rental market.
Turnovers are complex processes that involve multiple steps to coordinate and complete. For a long-term rental, the turnover process involves the following steps:
- The landlord or property manager conducts an inspection, which may reveal additional jobs like painting, carpet cleaning, repairs, etc.
- These jobs must be scheduled and completed, and another inspection may occur.
- A deep cleaning will also be required before or after all the work is done to ensure the property is in good condition.
- If the property is on the market for an extended period, a refresh cleaning may be necessary to keep it presentable.
If the turnover process takes a month, for example, there could be a minimum of three jobs scheduled, but it could be as many as ten or more. Coordinating all these tasks can be challenging.
The questions I would actually ask
Like any business, with short-term rentals, it is essential to know how much money will come in versus how much will go out and what your return on investment will be. You will have to develop a short-term rental pricing strategy. You will have a nightly rate and weekly rates, but your rental unit will probably not always be full, especially in the beginning.
You should ask yourself a few questions to understand your operating costs.
- How much do you need to charge to make enough to cover cleaning fees, commission fees, taxes, labor, maintenance, amenities, and other expenses?
- What is your potential cash flow if your rental is booked every single night of the month?
- How many days can it sit empty while still turning a profit?
Having straightforward answers to these questions and knowing how much flexibility you have while still staying financially viable will help you decide as you move forward with your rental business.
Managing whichever strategy you pick
If you’re ready to take some of the weight off your shoulders and automate your short-term rental strategy, then TIDY is here to help. TIDY allows you to automatically book favorite cleaning professionals, add to-do lists specific to each rental, manage maintenance requests, and more.
With solutions like TIDY that sync to existing property management tools, knowing that the space your guest is arriving to is clean, welcoming, and well-maintained is a breeze. TIDY can also compare the short-, mid-, and long-term income for the same property before you decide.
The main thing is really to make it clear that this is about Airbnb property management. Vacation rental management is definitely our sweet spot, so I am happy to do long-term rentals, but Airbnb is better.