Pros and Cons of Short Term and Long Term Rentals

When we think about rentals, there are two ways to go about it – short-term and long-term. It is important to understand what both these types of rentals mean and it is only then you will be able to make an informed decision.

A short term rental is a rental property, also known as a vacation home that can be rented for a week or three days in a week and a maximum of one month, every year. On the other hand, a long term rental property allows a person to stay for a period of 6 months. They are similar to rental properties managed by real estate companies and landlords.

As a landlord, it is important to decide whether you are going to give out your vacation home on a short-term or long-term basis. You can only decide this after you know the advantages and disadvantages of both these rental and it’s important to finding vacation rental to meet your needs.

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Here are some pros and cons of short term rental homes.


Higher monetary benefits: Short term rentals will fetch you higher amounts. You can customize the rent based on the demand, tourist in flow and the season. Also, the rental frequency will be higher because guests stay only on a weekend or for a week at the maximum. This allows you to charge per day rate instead of a flat rate and this increases your earnings.

Freedom and flexibility: You have the flexibility to use the property when it is not being rented out. If you have an empty vacation slot for that year, you can use it for personal use instead of letting it lie vacant or without a guest.


Higher competition: The tourism industry is booming all over the world. Renting out a vacation home may not be that easy during low seasons. Today, most people prefer vacation homes over hotels and this has made the market extremely competitive. You would have to compete with other property owners to attract and retain guests.

Fewer opportunities: During peak holiday seasons the tourist inflow is likely to be on the higher side. If you are not prudent with your reservation system to get maximum number of guests, you may lose out on a lucrative vacation season.

Limited income: The income is limited to the number of vacation days you intend renting out your property. While it is possible to charge a higher price based on the demand, the limitations come in the form of frequency of renting out.

Increased maintenance: Since the rental period typically lasts for a week or less, you will need someone to constantly clean up and maintain the property. You also need to follow up regularly on rentals and be available for renting out the property. It can be restricting for you in some ways. For example, you will need someone on the site with the keys to the property to show it to the guests.

And, here are some of the pros and cons of long term rentals


More stability: Long term rentals offer more stability in terms of rental income. The income may not be as high as short term, but it gives sustenance. Since you will be renting it out for a long time, you can be assured the income is secure for that period. Also, the possibility of the property lying vacant during the off-seasons reduces, as the rental period can run into the off-season as well.

Less frequent maintenance: In a long term rental, you will not need someone dedicated to take care of the property while it is being rented out. A long term tenant will take care of the house and its cleaning needs.


Bad tenancy: The only disadvantage of long-term rental is if you have a bad tenant then you will be stuck with them for a long time.

Choosing between short term rentals or long term rentals should be a carefully thought over. Consider both the sides of the coin before you decide to rent out your vacation home as a short- or long-term rental.

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  • There certainly are pros and cons to both, however for those living in a more temperate climate can reap the benefits of an “all year round” seaonsality, places like Hawaii, Costa Rica and Florida get that benefit. I do agree, there is higher competition for sure on the short term side, but with positive reviews you can keep em coming back each year!

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