These days, short-term rentals have increased in popularity, providing a good option for people who do not wish to commit to long-term leases. Short-term rental contracts can cover rooms, apartments or even entire homes, and many people find it tempting to rent theirs for extra income.
However, as with any move on the real estate market, it comes with both potential positives and drawbacks. You must understand all sides of it before making your decision.
Forbes looks into some of the biggest concerns revolving around short-term leases. First, they have more expenses associated with them. You can achieve a higher long-term income over time, but the costs associated are not any lower. Traditional rentals mean a lower vacancy rate. You also do not have to constantly prepare and clean your property, which you need to do between every short-term renter.
Short-term renters also often come and go by season. They will often snap up leases during holidays or vacations, especially in the summer. But this means you will likely go through periods of time where you do not make a profit.
Running into restrictions
You can also run into more restrictions with short-term rentals, especially when it comes to your bank or your HOA. Many leases are vague, but you need absolute clear permission before renting out your rooms or property. Some agreements even ban short-term rentals in specific. If you have a mortgage, some banks will not allow you to rent out, either. These are all factors to keep in mind when determining if this move is right for you.