To many real estate investors, the default way to obtain a return on their investments , is to procure a long term tenant for their property. However in view of the low rent and bad economic and social times, this option is no longer viewed as the preferred option.
With the increasing popularity of AirBnb and many other vacation rental portals, many owners have tried letting out their properties on them instead.
Let’s examine the advantages that Short Term Rental can bring you.
Short Term Rental can definitely get you a higher Return On Investment(ROI ) , compared to a traditional long term lease. It a well known fact that properties that allow short term or transit stay will generally generate a higher income , as compared to a long term tenant paying a fixed rent every month. With a short term rent property , you are able to increase the daily rate over a weekend or peak periods, therefore optimising the income that you will be getting.
2. Getting a short term tenant versus a long term one
We know that in any market , there are always more people looking at short term or daily rent than long term rent. Therefore its much easier and faster to procure a short term tenant or guest. Its a common fact that a Landlord very often has to wait for months before getting a long term tenant, considering all the tedious reference checks. In cities like Singapore and Kuala Lumpur , Malaysia, it takes a very long time to get a proper qualified tenant. As a result many months of lost income will be incurred.
3. Having a Short Term tenant versus a long term one
Its true that having a short term tenant, the Landlord will have to take care of more house keeping and maintenance matters compared to that of having a long term tenant. However, with the constant up-keeping of the property , it keep the property in optimum condition as compared to having a property with a long term tenant that’s always in the house , utilising every single part of the property over the entire period of the lease. We also have to acknowledge that the short term tenant who’s often not in the premises ,for most part of his or her stay!
Should the owner eventually put this property in the market for sale, a property with a better condition will definitely commands a higher selling price.
4. Flexibility of stay for owner
If renting out on a short term basis, the owner also has the flexibility to stay inside his or her house. All that needed to be done , is just to block out that period of time , that the owner will be using. In this scenario , the owner will be able to save on alternative accommodation such as hotels.
If you are renting to a long term tenant, the owner will have no chance of using their own property for their own stay at all.
From the above analysis , its very obvious that letting out your property on a short term basis is a far more viable option than getting a long term tenant. However what is preventing from most owners from letting out their properties on short term and Airbnb stays, is most of them do not have the time and resources to manage the screening of different guests ,checking in and out of them from the properties, house keeping , manning the listing of the properties on the vacation rental portals and many other related tasks.
However in recent times, many savvy home owners and investors have sought the help of professional vacation rental managers to solve all of the above issues. Home owners who are keen to jump onto this home sharing or short term rental boom should consider engaging a professional vacation property rental manager.
Host My Guest manages several homes in Singapore & Kuala Lumpur for the purpose of short term and vacation rental for leisure and business travellers. With a specialised local knowledge , we are well equipped to handle tasks and enquiries for your homes in both cities.