What you should know about short-term rental properties

Short-term real estate rentals have gained popularity in recent years and seem likely to maintain their appeal. Many travelers and tourists now seek out these properties as a cost-effective and interesting way to secure accommodations for a few days or weeks.

Owning a short-term rental property as an investment is in many ways similar to owning more traditional long-term rentals. In exchange for renting the property, the property owner is paid a fee that covers ownership expenses, and generates a profit.

Over time, the property increases in value, meaning the owner has both a short-term revenue stream and a long-term appreciating investment.

Be knowledgeable about short-term rental property ownership

If you’re considering buying a short-term rental property, there are a few things to be aware of to ensure it’s the right move for you.

Do you want to be a landlord?

Whether your tenants rent for one night, one week or several months, a short-term rental is your property and you’re a landlord.

This means you’ll be responsible for maintenance and repairs. If a furnace breaks down at 2 am, or if a pipe freezes and bursts on a Sunday morning, someone must take the call from the renter and address the situation.

Many owners contract for these services – often through a short-term rental management company – but keep in mind doing so is an expense you will have to build into your rent calculations.

You’ll be dealing with multiple renters

Owners of traditional, longer-term rental properties usually deal with renters for a year or more.

That means screening renters is an occasional task. However, with short-term rentals, you may be dealing with several renters per week. Fortunately, many short-term rental companies screen guests, removing the burden from the property owner.