The popularity of short-term rentals has mushroomed at a rapid pace over the last few years. As an Evanston rental property owner, you might be thinking about buying or converting one of your properties to a short-term rental. Before you do, it would be a good idea first to look at both the pros and cons of owning a short-term rental property. Though short-term rentals are a good fit for some, other investors may find that the amount of work involved isn’t worth it.
Perhaps the number one advantage to owning a short-term rental property is the possibility for higher rental income. Short-term rentals more often than not rent for more per day than a long-term rental would. So if you can keep your property rented out, you could make quite a bit more each month than you’d get from a long-term lease. Short-term rentals let you increase prices at times of high demand, granting you to maximize your profits.
Another great benefit of owning a short-term rental is that it offers a lot of flexibility. Depending on which way you go about it, you could be renting your property a week at a time or for several months. If your rental property is in a nice vacation spot, you could make use of any vacancies as an opportunity for a personal getaway. You can also easily set your property upon rental platforms like Airbnb, and that means never dealing with leases. You can also remove your listing from those sites at any time should you want to transform your property back to a long-term rental.
Then again, there are a few drawbacks to owning a short-term rental. Even If there is frequently a good potential for higher income, at the same time, that income is a lot less stable. Most short-term rentals experience seasonal fluctuation, which means your property might be sitting empty a lot more than you would like. While good marketing and creativity could help you avoid this, it’s important to remember that even your best efforts may not be enough. Short-term rentals are extremely sensitive to economic conditions, and economic downturns often result in less demand.
Another important drawback of short-term rentals to bear in mind is that you will have higher costs. Preparing a short-term rental could mean requiring you to furnish it and stock it with essentials. If you want your property to be competitive, it will need to have nice furnishings and décor. You’ll also need to make sure that your tenants have things like linens, toilet paper, pots and pans, and more. These items will also have to be re-stocked between tenants, which can start to add as time goes on.
There will also be more cleaning and maintenance required for a short-term rental. If you’re doing it yourself, getting the place ready for the next tenant will take quite a bit of your time. But hiring someone to do it for you could get costly, particularly if your property is in high demand. It’s critical to ensure that the place is being thoroughly cleaned between tenants and that necessary maintenance and repairs are being done correctly and promptly. Failure to do so might result in bad online reviews and fewer bookings in the future.
Finally, it’s essential to check state and local regulations on short-term rentals. Some cities have created strict regulations forbidding short-term rentals in some areas, and so have many homeowners’ associations. The reason for the restrictions will vary from one location to another – and even from neighborhood to neighborhood – it’s important to do your research before buying or converting a property to use as a short-term rental.
Need help managing your current rental property? Give Real Property Management Chicago Group a call at 312-265-0660. Or conveniently contact us online.
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