Furnished and short-term rental listings has become a hot ticket item in the real estate market. Property owners, real estate companies, and corporations have invested in short-term rentals to boost their profit margins.
Depending on the city, the average cost of a hotel room can range from $150.00 to $250.00 per night. For corporate travellers or a family transitioning in the new city, this can put a dent in the budget. Regardless of the reason, furnished and short-term leasing gives the tenant a bigger bang for their buck and can turn a profit for property owners. However, it’s important that both parties understand the process and how it works.
A short-term rental listing is a property that can be leased for a limited amount of time. It requires a short-term rental agreement, which can vary anywhere from a few days to a few months. Depending on the leasing agreement, tenants can be charge a nightly, weekly, or monthly rate. On average, short-term leases last six months or less and can be rented for various reasons, such as:
- Corporate travel
- Interim residency periods
A furnished rental listing is slightly different and doesn’t always require a short-term lease. A furnished property comes with all the dressings a person would expect in their own home. The lease agreements are contingent on the needs of the tenant, for example a renter may require kitchen supplies or beds.
Owning a furnished or short-term property comes with a lot of red tape. It’s important that future property owners know all of the information prior to investing. Here’s a look at three key factors that need to be considered.
Understand Local Regulations
Depending on the location, turning a property into a furnished or short-term rental will involve several regulations and restrictions. Some of the issues that the local housing authority will consider includes:
- The housing status of the potential landlord
- Type of rental property (condo, apartment, home)
- Development or construction plans
For anyone investing in a furnished or short-term rental, it’s imperative that they check with their local government. Starting a project with this magnitude could be costly if the proper checks and balances aren’t in place.
Repair And Cleaning Costs
When choosing tenants, landlords can be more selective. However, with the high turnover rate, they run the risk of incurring cleaning and repair costs. Before investing in a short-term or furnished property, investors should consider their losses. It’s important to have an iron clad contract with the renters that includes a security deposit and cleaning fee. It’s also a good idea to consider only using listing sites that provide an insurance policy.
From last minute emergencies to natural disasters, situational changes can cause problems for property owners. It’s essential that investors consider empty property costs which can happen for an extended period of time. One way to offset these costs is by having an effective booking policy to offset cancellations. For example, a non-refundable security deposit or a 48 hour cancellation policy. Having these things in place will assist in keeping the property profitable.
Top Furnished Or Short-Term Rental Listing Sites
Finding a listing site that is competitive and drive foot traffic is essential. Here’s a look at three trusted sites that have helped both property investors and potential renters reach their end goal.
Homeaway provides listing for private vacation homes throughout the world, including the United States and France. It allows potential renters to narrow their search by using filters that are based on their needs, such as location and number of bedrooms.
Airbnb is one of the largest short-term and furnished rental sites on the planet. This global phenomenon allows property owners to rent out a shared space in their home, a private room, or their entire property. Both renters and property owners are vetted to ensure safety for everyone involved.
Owned by popular travel site, TripAdvisor, Flipkey has approximately 830,000 properties around the globe. It provides traveler reviews and information about the area, local attractions, and dining options near the rental property.
The Bottom Line
Furnished and short-term leasing options are great alternatives for people looking to invest in property and renters looking for a temporary home. Implementing the proper research and planning around a budget can make short-term and furnished leasing a lucrative investment for both parties.