Pros and Cons of STR

The Airbnb vs. renting debate continues heating up, thanks to the coronavirus pandemic and how it changed how we live, work, and travel. Hosting short-term rentals and traditional rental options have their pros and cons, but which one is right for you?

Short-term renting gives you the opportunity to make money from your home while providing travelers with a unique and affordable place to stay. You can be as involved or hands-off as you want, and there is no long-term commitment required.

This blog post will break down the pros and cons of choosing to invest in short-term vacation rental opportunities over traditional long-term homes.

Host Tools provides an automated, unified calendar for short-term rental hosts, allowing you to seamlessly list on all major channels. Start your free trial today! 

Potential Income From Short-Term Rentals Vs. Full-Time Rentals:

Short-Term Rentals

If you’re looking to make some extra cash, short-term rentals are a great way to do it. You can set your own rates and schedule, and you don’t have to commit to a lease.

Hosting a short-term rental allows you to be in complete control of your rental property. This is particularly useful if you find that your occupancy rates are higher at certain times of the year than others. By being able to adjust your pricing accordingly, you can maximize your earnings and make the most of busy periods.

Of course, this does require some flexibility on your part – you may need to be willing to change your prices at short notice – but it can be a great way to boost your income. And, with the help of a good property management system like Host Tools, it’s easy to keep track of your rates and make changes as necessary.

Full-Time rentals

Traditional renting doesn’t offer the same earning potential as vacation rentals because you typically have tenants sign a one-or two-year lease. In most cases, you won’t be able to raise the rent until the lease is up for renewal. Long-term leases also tie up your property, preventing you from taking advantage of higher demand periods like holidays and summer vacations.

Winner: Short-Term Rentals

Upfront costs

Short-Term Rentals

Hosting a short-term rental can require more work upfront than some people may realize. For example, you will need to make sure that your home is fully-furnished and properly prepared for guests, which may include adding extra inventory items like linens or toiletries or making sure that the space is clean and comfortable.

Full-Time Rentals

When renting out a property on a full-time basis, there are typically much fewer upfront costs involved than hosting a short-term rental. For example, you will not need to worry about stocking the property with furniture or linens, and you will not need to worry about preparing it for guests.

Additionally, you will not need to worry about regularly cleaning the property. However, it is essential to note that full-time rentals may require more ongoing work than short-term rentals, as you will need to deal with tenants regularly and handle any maintenance or repair issues that may arise.

Winner: Full-Time Rentals

Time Spent Managing the Property

Short-Term Rentals

If you do everything yourself, you will spend much more time managing your rental than a full-time rental. However, if you automate with Host Tools, you will not spend any more time than you would with a traditional rental.

In fact – you'll likely spend less. By automating your responsibilities with Host Tools, you can make hosting a vacation home a more flexible and hands-off option. With Host Tools, you can automate things like setting prices, managing reservations and communicating with guests.

Our platform makes hosting much easier and less time-consuming. You can spend less time worrying about logistics and more time doing what you enjoy, thanks to automation. Automating your hosting duties with Host Tools is the perfect way to make hosting a breeze!

Full-Time Rentals

Managing a full-time rental can be time-consuming but generally takes less gtime to manage than short-term rentals. There is some work required for managing repairs and maintenance and handling tenant inquiries and concerns. Tenants expect quick responses to their questions and concerns, and without automation tools like Host Tools for short-term rentals, you will be doing all of this work manually. 

Winner: Full Time Rentals. Though if you are using a PMS like Host Tools, it may be a draw between Short-Term Rentals and Full-Time Rentals

Flexibility with Scheduling

Short-Term Rentals

One of the biggest advantages of hosting vacation rentals is the flexibility it offers. You can rent out your property for as little or as long as you want. This gives you the ability to generate income when it’s convenient for you. It also allows you to take advantage of high demand periods, like summer and holidays.

Full-Time Rentals

As a landlord, you have the potential to make a lot of money. However, this is only if you have multiple tenants. If you are stuck with one renter for a year, your income potential is significantly reduced. This is because you will not be able to adjust nightly rates to match the busy season. 

Winner: Short-Term Rentals

The Market

Short-Term Rentals

It’s currently a short-term rental hosts market. In today's climate, now is a great time to be a vacation rental host.The current market conditions make it easier to find renters, and the demand for short-term rentals is high. So if you're thinking about renting out your home or apartment as a vacation rental, now is the perfect time to do it. You can maximize your earning potential and get started in the sharing economy today.

Full-Time Rentals

It may be difficult to find a renter in the current market to rent your home. The rental market has been affected by the COVID-19 pandemic, with many people losing their jobs and being unable to afford rent. There are still some people looking for places to rent, but they may be more picky than usual and may not be willing to pay as much.

Winner: Short-Term Rentals

Legal Hoops

Short-Term Rentals 

Understanding the increasing rules and regulations on short-term rentals can be confusing. Additionally, short-term rental laws vary from state to state. While this may complicate getting your rental up and running, if you do your due diligence jumping through legal hoops will be well worth the effort to run your short-term rental. 

If your city does allow short-term rentals, you might have to apply for a permit. This means that you would have to pay extra fees. If you think to skip this step, think again, as you could get fined. In some cases, you might even have to pay for legal action. You may also have to request permission from the HOA if your rental property is in an area with a Homeowner's Association.

Short-term rentals can be a great way to make some extra money, but it's important to make sure that you're aware of the legal rules and regulations in your area. Doing your research ahead of time can help prevent any headaches later on.

Full-Time Rentals

Full-time rentals are much easier to get permits for than vacation homes, as landlords only need to show that they meet the basic requirements. This is primarily because short-term rentals are seen as a "threat to the community," as they can lead to increased traffic and noise.

In contrast, full-time rentals are seen as more beneficial to the community as they provide long-term housing for residents. As a result, it is much easier for landlords to obtain permits for full-time rentals than for short-term rentals.

Winner: Full-Time Rentals

Wear and Tear of Property

Short-Term Rentals

Contrary to popular belief, one of the benefits of using a property as a short-term rental is that there is significantly less wear and tear. This is because professional cleaners are used between every guest, and guests treat the property as if they are visitors rather than full-time renters.

As a result, people are not going to make modifications such as nailing things into walls, as they might do if it were their own home. This reduces the overall amount of wear and tear on the property.

Full-Time Rentals

Full-time rentals typically have more wear and tear than short-term rentals. This is because people live in the property full-time, and they may not treat it with the same care as a visitor.

In addition to modifications that tenants make, there is also delayed maintenance, or things that your tenants just “let go” in the property. This can lead to more build-up of dirt and grime, which can cause wear and tear.

Winner: Short-Term Rentals

Liability and Damages

Short-Term Rentals

When you host a vacation rental, you are responsible for any damages that occur during the rental. However, investing in short-term rental insurance can help protect you from damages to your property and liabilities from guest incidents. In most cases, standard homeowners or renters' insurance will not cover damage caused by guests. 

Short-term rental insurance is designed specifically for this type of rental and can offer coverage for:

  • Damage to your property caused by guests
  • Injuries of guests
  • Liability for any accidents that occur on your property
  • Loss of income (sometimes)
  • Property theft or damage by guests

Full-Time Rentals

As a landlord, you are responsible for maintaining the property in a habitable condition and making repairs when necessary. You are also liable for any damages your tenants may cause to the property. Investing in landlord insurance can help protect you from liability claims and damages to your property.

Landlord insurance typically covers:

  • Damage to the property caused by tenants
  • Injuries of tenants
  • Liability for any accidents that occur on the property
  • Property theft or damage by tenants
  • Loss of rent due to tenant damage or eviction
  • Legal expenses related to tenant disputes

Note: It is traditional for landlords to collect a security deposit, but it is also possible for short-term rental hosts to collect a refundable security deposit as well.

Winner: Tie

Income Security 

Short-Term Rentals

Short-term rentals provide less income security for the host than a full-time landlord. Since the tenant is only there for a short period of time, the host may not be able to count on a consistent source of rent income. This can make it difficult to budget and plan for the future. Additionally, the host may have to spend more time and money on advertising and maintaining the property, which can cut into profits.

However, as we discussed earlier, there is significantly more income possibility for short-term rentals than full-time. When first starting your short-term rental business, it may be difficult to predict income, but after time your vacation rental has the potential to make more money in a week than a month of full-time renting.

Full-Time Rentals

An advantage of traditional renting is that it provides long-term security for both the tenant and the landlord. The tenant is assured of a place to live for an extended period of time, while the landlord knows they will have a reliable source of income.

Winner: Full-Time Rentals

Final Thoughts

Overall, it is important to do your research before deciding whether to rent your property as a short-term rental or a more traditional method. Both have their own set of pros and cons that should be considered.

By taking the time to understand the rules and regulations in your area, as well as what is involved in each type of rental, you can make the best decision for your situation. When choosing to invest in a short-term rental, you have Host Tools at the ready to make your day-to-day operations easier.

Our platform allows you to automate everything from guest and cleaners communications to booking calendars. With our automation tools, you can manage your property from anywhere in the world! 

Host Tools provides an automated, unified calendar for short-term rental hosts, allowing you to seamlessly list on all major channels. Start your free trial today! 

Leave reply