Long Term vs. Short Term Vacation Rentals: Which Strategy is Better for Investors In Temecula?
Investing in vacation rentals is one of those things that can be done in so many different ways. Some prefer long-term vacation rentals, while others are perfectly happy with new guests every few weeks. There are so many ways to be a successful vacation home investor that it can feel overwhelming trying to find your niche. So when it comes to long-term vs. short term, is one really better than the other?
The Upside To Investing In Long Term Vacation Rentals In The Temecula & Murrieta Area
A long-term vacation rental is a rental in which guests stay for a minimum of six months. It can get blurry in the 4-5 month range, but for the most part, guests who are staying six months or longer are considered long-term tenants. When you have a long-term renter, they’re paying the same amount of money for an extended period of time. This is beneficial when it comes to cash flow, compared to the fluctuating income that comes with weekly renters. In most cases, long-term renters are responsible for paying the utilities.
And The Down Side….
Chances are, you bought your vacation home in an area that you like to visit. You probably bought it in hopes of staying there every once in a while. When you have long-term guests, it means you have fewer options to visit your vacation home.
In some areas, there are more rules and regulations that both the tenant and the landlord must follow that are different than short-term rentals. For example, guidelines in place to protect the renter may mean the landlord has limited opportunities to check in on the property.
One issue some landlords have with long-term rentals is that the renters turn into squatters; overstaying their welcome without paying. This can be an annoying (and costly if you have to evict them) process
The Upside To Investing in Short Term Vacation Rentals In The Temecula & Murrieta Area
When you invest in short-term properties, you have more opportunities to enjoy the home yourself. You can squeeze in a quick visit between guests, or block off a week or two in advance. Investors who buy property in popular areas like Murrieta and Lake Elsinore CA probably did so because of the beautiful scenery and vibrant nightlife, which makes it highly desirable for vacationers as well.
Because the house isn’t being lived in all year long, it receives less wear and tear than a long-term rental. Professional property managers like Benefit National Property Management have an incredible way of keeping your property in great shape before, during and after a guest’s stay.
Investing in a short-term rental may not mean the money is as consistent as a long-term, but you usually make more with short-term renters. Short-term renters are willing to pay high prices during the high season, which makes up for the lower rates during slow seasons. And while a week or so of vacancies can impact the cash flow, short-term rentals usually bring in a higher income.
Another financial upside to short-term rentals are the tax deductions. Every state is different, so make sure you research the specific tax breaks designed for short-term real estate investments.
And the Down Side …..
To appeal to the vacation renter’s market, your home needs to be a place where they feel safe, comfortable and relaxed. This means making constant upgrades to your rental property to ensure the renters have the best experience possible. Things like replacing mattresses, upgrading appliances and giving the décor a makeover are important (yet costly) things that landlords need to keep in mind when marketing their home to travelers
For investors, the short-term vacation home may mean an increased income, but it also comes with its fair share of things to manage. If you aren’t working with a property management team, you’re responsible for keeping up with the calendars, determining rental rates, tenant screening, maintenance, cleaning, guest communication and more. You need a solid property manager. If you only have 2-3 long-term renters a year, it could be manageable. But if you’re trying to keep 40+ weeks of renters organized, it could become overwhelming.
When it comes to investing in a Wildomar vacation rental, there are many right ways to do it. If you are looking for income that is consistent, long-term rentals in Temecula may be for you. If you’d prefer higher rental rates, you may be a short-term rental sort of person. Each has its pros and cons, and each can be wildly successful if done right (and managed properly)