Long-Term or Short-Term Rentals, How Do You Choose?

[Account Closed]

Hi Everyone! 

I've made up my mind, I'm going to invest in my first property! However, I'm unsure if it's smarter to choose a property meant for long-term renting or short-term renting. To clarify, by a "long-term" rental, I mean some type of single family house or townhouse in the city I live in (Raleigh, NC) that a tenant could potentially live in for years. By a "short-term" rental, I mean something like a condo at the beach a family would rent for a week at a time. 

One clear downside to the short-term option is likely difficulty filling the unit in the off season. Can you guys help me with other pros and cons? 

Thanks!

Melissa S. 

[Erin Spradlin]

@Account Closed, with short-term, you make more money but more work is required. Vacation rentals bring in a ton of cash (we were making $3K profit a month on one bedrooms in Denver), but it wasn't free money. There was a lot of cleaning and guest management required. That said, these days you could hire that out to someone that will manage it for 10-20% of the profit (so you could factor that in with the numbers.) Regarding the off season, you could see if AirDNA has a report for your city. If they do, it will include numbers you can pull in for the off season (Airbnb will also provide some of this if you go in and start the process of a listing.) Some other things to consider before going the short-term route are what your city laws are and if they are monitoring Airbnb/actively pursuing them and if you rent a condo, if there are any HOA limitations. Anyway, good luck! The money is great if you can do it.