Did you know that 40% of people take one vacation annually? Whether going on a trip to the beach, mountains, or another location, everyone enjoys escaping their everyday life for another destination.
The way we vacation has evolved throughout recent years. Instead of booking stays at hotels or bed and breakfasts, many vacation-goers opt to stay at a short-term rental property, like an Airbnb. Short-term rental properties allow travelers to stay in a house, apartment, or single room instead of a hotel room.
For real estate investors, short-term rental properties have numerous benefits. This guide will discuss the top 10 benefits of investing in a short-term vacation rental property.
1. High Demand
The demand for short-term rentals continues to grow. In 2021, the demand increased by 27.5%.
An increase in demand means there needs to be more of a supply of short-term rentals. Entering the short-term rental market is relatively simple. Investing in a property in an area that’s a popular travel destination ensures that keeping your property book will be reasonably easy.
2. Increased Profit
A short-term rental in a desirable location will increase your profits. The income you’ll see from a short-term rental can perform a long-term rental.
Property owners can set the rates for their short-term properties according to a few factors. These factors include:
- Type of property
- Time of year
- Popularity
- Amenities
Short-term rentals generally have a quick turnover. Your property will see a wide range of renters in a short time. You’ll see more income in a short time than you would with a traditional year-long lease.
Additionally, a short-term rental lease guarantees the property owner more. You can feel confident that your renter will pay on time and in full.
3. Improved Maintenence
When you own a short-term rental property, you can stay on top of maintenance. Your property will be cleaned and inspected between each guest. You and your staff can find maintenance problems before they become more severe.
With long-term rentals, many property owners must wait until their renter notifies them of a problem. Sometimes renters can take weeks or months to let their landlord know of a problem. By then, fixing the issue can be expensive.
Many vacation rental services, like Airbnb and VRBO, have cleaning fees built into the booking costs. As a property owner, you don’t have to pay to have your unit cleaned out of your pocket.
Partnering with a professional property management company also ensures that your property stays in tip-top shape. It’s their job to inspect your unit and handle all customer service requests. You can feel confident that all repairs and maintenance requests are being addressed on time.
4. Flexible Options
You can decide when your property is available for rent. If you want to renovate part of your listing or do deep-cleaning, you can have your unit unavailable for that time. You can also block off a few weeks or months if you want to stay in your unit.
You can also adjust the price of your unit whenever you want. Increase the cost of your unit after you’ve made certain upgrades. Adjust your rental rate if your renter intends to book for an entire month.
5. Low Barrier to Entry
Property owners can take out a loan to purchase a short-term rental property. You can use your loan money to generate more income for yourself.
Short-term rental properties are an excellent option for new investors, especially those who don’t have much money to invest. Investors can generate income at a fast rate.
6. Tax Benefits
Short-term rental properties provide investors with various tax benefits. For example, investors can write off the interest they pay on the loan for the property. They can also deduct the following things:
- Marketing
- Insurance
- Maintenance
- Management fees
Property owners can also deduct how much the property has depreciated.
7. Meet New People
As a host and owner of a short-term rental property, you have the opportunity to meet lots of new people. You can decide how much interaction you have with your guests. If a property management company handles your unit, you might also not have any interaction.
However, you can use your property as an opportunity to make new friends. You can host cocktail hours or make breakfast for your guests. Learn about new cultures as you interact with people from around the world.
8. More Value
Your rental property will increase in value each year, depending upon the market. The longer you keep your property, the more you can sell it for when the time comes. Your property will also increase in value as you make upgrades and renovations.
9. Access an Emerging Market
The concept of short-term rentals isn’t new, but how properties are marketed. With many people working remotely, they can work from any location at any time.
Many potential renters want the amenities and high level of service that hotels provide. They also look for locations that can make them feel like they’re at home. Investing in a short-term rental property ensures that you provide the service many people are looking for.
10. Diversify Your Investments
A short-term rental is a great way to diversify your investments for investors that own multiple properties. The market for short-term rentals is completely different from other real estate types. Short-term rentals allow you to quickly get into the market if you don’t currently own real estate properties.
With a short-term rental, you can protect your portfolio from the market’s volatility. The revenue you generate from the property can cover the mortgage on the unit.
Learn About the Benefits of a Short-Term Rental Property
A short-term rental property is a great way to bring in the additional income at a quick rate. Many people visit the Tampa area each year. Tap into that market by investing in a short-term rental.
Emperor Management provides property management services for short-term rentals in Tampa. Whether you need help managing your online listing or require our full services, we’re here to help. Contact us today to learn more.