Short-term rental or long-term rental? Are you currently wondering which one is the best rental option for your property? If yes, then this article is for you.
Let's start with the definitions: Short-term rental properties refer to furnished homes, apartments or condominium units that are being leased for a few days or weeks. The rent is paid on a nightly or weekly basis. Meanwhile, a property that is being rented out for six months or more is typically called a long-term rental property.
Guests can find short-term rental properties in booking websites such as Airbnb, HomeAway and Booking.com. These booking websites disrupted the accommodation sector, especially in the last 5 years. Who would have said 10 years ago, that paying to stay at a stranger’s place would become a thing? What seemed like a crazy idea, slowly became an interesting option for travellers who wanted something more authentic as well as property owners that wanted to make extra money out of their properties. It now attracts not only homeowners, but also property investors, developers and other stakeholders from the real estate industry.
In this article, we will list the main reasons why short-term rental is a great choice for you if you have a property to rent. But first, watch our video to know more about the main differences between short-term and long-term rental for property owners.
Now that you identified the main differences between long-term and short-term lettings, take a look at some of the reasons why you should invest in the short-term rental market.
Australia is a great market for short-term rentals
Australia’s warm weather, iconic coastlines and stunning beaches are some of the reasons why such a big number of tourists visit the country throughout the year. According to last years’ statistics from Tourism Australia, the country had one million international arrivals in December 2017. This number is 4.0% higher in comparison with the same period in 2016 and the trend is that it continues to grow year-on-year. This has a huge impact on the short-term rental market. With a higher demand for accommodation and short-term rentals in general, property owners have a great opportunity to maximise rental income especially during the peak season.
Greater flexibility for you
Would you like to stay in your house or unit during certain periods of the year but rent out most of the time or maybe you would need to welcome family/friends in the property for particular occasions? Then there's no doubt that short-term rental is for you. You will be able to choose only the specific days or months that you want to have your property rented out. This option is also more convenient if you suddenly decide to sell your property. In this case, you don’t have to wait for a long-term tenant to leave the place.
Higher rental income
Short-term rental allows you to charge more per night for a few days or weeks than the regular monthly charge. You may also set your rates depending on your city’s peak and off-peak tourism periods, such as on holidays or when there are major events happening. These include concerts, historical celebrations, sports competitions, conventions, etc.
Here at MadeComfy, we see our customers achieving up to 11% rental yields with our end-to-end property management and dynamic pricing services (click here if you want to read more about dynamic pricing).
Greater contribution to the economy
By having your property for rent on a short-term rental basis, you are contributing to the economy. A study from ACIL Allen (2017) found that the short-term rental sector generated approximately $1,041 million worth of revenue in 2016. For the same year, it is estimated that the sector supported about 40,823 full-time jobs. More information about the contribution of the short-term rental market to Australian economy can be found in our Australia's Short-Term Rental Report 2018. Click here to download.
By investing in the short-term rental market, you help attract more tourists to your town or city. An increase in tourism leads to more income for both the local and national governments, and it also helps create new local jobs.