Deciding between a long-term and short-term rental investment strategy can be a tough choice. The first step in making this decision comes down to knowing the differences and how they can affect you and your investment property in the long run.
Amenities that you will want to provide to your tenants of a short-term rental include all the things a hotel might provide, such as shampoo, conditioner, access to wi-fi, furniture, coffee and tea, toilet paper, fresh linens, and towels. This is to help provide an incentive to your visitors to possibly return some other time. Other items you may like to consider providing, especially if you’re providing a home or condo, is a fridge to place food in to cook or save for later.
By no means do you have to provide your tenant a fridge, washing machine or dryer, towels, or any of the above. That is on them to get those items. Alternatively, you could opt in to provide some amenities, such as having one or all utilities covered in the tenant’s rent (of course for a premium value). The amenities you provide come more in the form of providing maintenance on the house and yard and providing a place to stay long term.
This will not always be reliable, especially since Arizona’s seasons and weather have a great influence on how many visitors we receive annually. However, thanks to providing a premium price on the services you provide, if you have someone visiting for a whole month, you could make more than a single month of a long-term rental. Other costs you’ll need to consider are the amenities you’re providing to the guest, as well as any fees associated with the site you are listing your vacation investment on.
As already mentioned, you take care of the maintenance costs of the home. This can be as small as a gardener visiting every few weeks to as big as needing to replace a roof or an AC unit. The positive with these costs, while much bigger than others faced by the short term rental provider, is that you don’t have to spend as frequently as them. A long-term rental is lower maintenance from the short-term rental that requires frequent visits from a property management company or yourself.
Dealing with HOA:
Short-term rentals are not always welcomed in neighborhoods that have HOA’s, and can result in a large fine. The shortest rental term allowed in many HOA’s is often times an entire month. This can limit where you may want to buy your rental, so keep that in mind.
Long-term rentals within HOA’s are a little more kind towards as the tenants will actually be living among the rest of the community and will likely treat the area with more respect in their minds.
Don’t forget to do your own due diligence before you buy either a short-term or long-term rental, and then come to us to finance your investment!