Advantages of vacation rentals: what you need to know
The vacation rental industry has been around as long as the vacation itself. However, recent technological advances have opened up the possibility for anyone with a vacant home to be able to rent it out and make a profit.
When investing in real estate, owners have to decide which type of rental to opt for.
Many factors can help owners decide whether they should opt for short-term rentals also called vacation rentals or long-term rentals. This decision is not easily made and depends on the nature of your property and other important factors.
In this article we will explain what a vacation rental is and what are its advantages.
What is a vacation rental?
First of all, let’s get familiar with the definition of a short-term rental.
A short-term rental (commonly known as a vacation rental or tourist rental) is the rental of a furnished property that is rented on a nightly or weekly basis, mostly to tourists or business travelers. Depending on the type of property, the rental location and other factors can determine whether the property qualifies as a good vacation rental.
Many short-term vacation rental owners rent their property for most of the year when they are not using it themselves.
They have become a popular alternative to hotels in the last 15 years, especially with the rise of collaborative economy websites such as Airbnb, Vrbo, TripAdvisor and Booking.com.
Advantages of vacation rentals
While long-term rentals offer fixed income and are generally easier to manage, there are several advantages to consider for a short-term rental:
1. Higher rental income potential
Not only can you set fluctuating rates based on the high and low seasons in your area, but also set a minimum length of stays for the peak seasons of the year to ensure you receive maximum earnings. Generally you can earn up to 50% more than a long term rental.
2. More flexibility
For owners who rent their properties on a short-term basis, there is much more flexibility. You can specifically block off calendar periods that you want to keep free for your personal use without any problem.
3. Less stress
In general, the duration of vacation rental contracts ranges from a few days to a few weeks at most. Hosting guests for short stays like these ensures that guests simply visit and sleep in your property and therefore won’t think about redecorating or rearranging furniture.
4. More control over the property
There is a big difference between short-term and long-term options when it comes to controlling your property. For short-term rentals, owners benefit from being able to inspect the property between each booking, to check that everything is in order and that nothing is broken or damaged.
5. Simplicity in finding tenants
For short term rentals, generally finding the tenants who wish to spend their vacation in your home is a much easier process, especially if it is managed by a specialized company, such as Beahost Rentals.
6. Secured payments
The payment of the vacation rental is always insured because the tenants pay before entering. Contrary to long term rentals in case of change of circumstances of the tenants there is a high risk of non-payment and it is very complicated to evict.
7. Increase in the value of the property
Tourist renting contributes positively to the appreciation of the property. Firstly, because the property is always in perfect condition and sales visits can be organized between one reservation and another. Secondly, because the property will benefit from the positive reviews that will give more confidence to the potential buyer.
8. Contribute to the sharing economy
These days we hear a lot about the sharing economy and its positive effects on society in general. By renting your property short term you are showing that you are an innovator who is helping to contribute to this modern way of living and thinking.
What is the best option?
There is no perfect answer for everyone because what sounds like a disadvantage for you, may be an advantage for others. However, we are convinced that vacation rentals have many more advantages compared to long-term rentals.
Studies have shown that the same rental property that would generate €1.000 per month as a long-term rental, can earn twice as much when rented to multiple guests in short-term rentals. You could then earn up to €12.000 more per year from the same property!
Vacation rental challenges
Doesn’t that sound great? Are you convinced? Perfect!
Let me tell you something else, vacation rental has a challenge and that is that the process requires a very complete management of the tenants and the property. That is to say, the check-ins and check-outs of the tenants, customer service work, keeping the apartment in order and always clean, knowing how to use reservations management technology and having knowledge of the tourist rental market.
That said, it is a very good investment, but it requires a lot of time and effort.
But, there is good news! If you are thinking of starting a vacation rental business and can’t dedicate the necessary time to it, we at Beahost Rentals offer you the help, we will manage your vacation rental, take good care of your property and treat your tenants with care. We collaborate with more than 15 vacation rental platforms, we use modern technologies and rental management software and we have a highly specialized and professional team.