I’ve been looking into alternative ways to add to my passive income and real estate is clearly near the top of my list. I had discussed the possibility of buying commercial or residential real estate and had settled on the former to start off. I’d probably go for buying condos rather than a house but then the question becomes…
Should I Look For Long Term Or Short Term Rentals?
Traditionally, when you’d own a rental property, you’d try to find a tenant that will stay there for several years and pay a monthly rent. That has worked very well of course over the years.
A Better Way?
You have probably heard that companies such as AirBnb and HomeAway have made it very easy to rent out an apartment/condo or even a house on a very short term basis. You basically list your place on a place like this:
And rent it out for a few days or even a week. It’s an interesting twist no doubt. There are some benefits:
-the price per night is usually twice or more of what you’d charge for longer term rents
-you have less risk of non-payment
-more flexibility (you can decide to sell it, stop renting, move there yourself, etc)
There are however some downsides:
-it’s unlikely/impossible that you will rent it every day
-there’s a lot more work involved (you need to meet renters to give and retrieve keys, etc, have the place cleaned, etc)
I would think that this strategy would work especially if the property is very well located since that is often what tourists end up looking for. One problem with this short term rental market is that there are a lot of properties that are unused and rented out this way for a short term period which keeps rates fairly low. I’m just not convinced that the extra work and hassle makes it worthwhile. I will continue to investigate though and would love to hear your thoughts.
Have you or someone you know rented out property on a short term basis through Airbnb or others? Was it done as an investment?If you liked this post, you can consider subscribing to our free newsletters here