The Four Benefits of a Short-term Rental

Why offer your property as a short-term rental?

With all the hype around short-term rentals on Airbnb and VRBO over the past few years, it can be easy to wonder what’s really going on. That said, the hype doesn’t come from nowhere, and there are some very real benefits to launching or buying a short-term rental. In fact, according to AirDNA, the global short-term rental market is expected to reach $170 billion by 2025. Check out the rest of this article to find out why you should jump in.

Earn extra income.

For most owners, at the end of the day, this is going to be the most compelling reason to go with a short-term rental. While there are other reasons that you’ll see later in this article, at the end of the day, it’s going to have to make financial sense.

The simplest, and most obvious financial benefit here is going to come if you currently live in a house with in-laws quarters that aren’t regularly used, a cottage, or just have a vacation property like a beach house or cabin that’s regularly empty. Operating a short-term rental in one of these spaces is often an easy yes, as the alternative is no income, so any income is great.

That said, there can also be massive upside in operating an investment property as a short-term rental rather than a long-term rental. This is especially true if you’re in an area that gets a lot of travel traffic, or have a property that’s well suited for weekend retreats. Compared to long-term rental, an STR in a good market, run well, can easily pull in 2-3x the return, or even more. Obviously, this isn’t without risk and cost, but the upside is tantalizing.

While the main objection is that it can mean more work, when partnered with an STR management company (especially one like us that will optimize your rental to outperform the market), you can easily still reap the rewards, while mitigating your effort and risk.

Increase your property value.

In some cases, owning a short-term rental can actually increase your property value. This is because short-term rentals are often seen as a more desirable type of investment than long-term rentals. This is because short-term rentals can generate more income, and they can also be easier to manage.

When you’re selling a property that has a proven short-term rental history, it’s going to be much more appealing to investors, as there’s already a proven business case for it.

Have a place to stay when you're not using it.

If you travel frequently, owning a short-term rental can be a great way to have a place to stay when you're not using it. Back to the point about monetizing your vacation homes, STR investment properties are a great way to be able to afford vacation homes that you can use throughout the year by simply blocking dates off from rental, or taking advantage of last-minute unbooked time slots.

This gives you the upside of a vacation home, while actually having a property that can be monetized, and makes you money instead of costing it.

Provide a unique travel experience.

Finally, one of the other huge things that people love about short-term rentals is the ability to provide a creative and unique experience for guests. When you rent out your home, you're not just providing them with a place to stay, you're also giving them a taste of your local culture and lifestyle.

When you offer your property as an STR, you’re not just renting it out, you truly are hosting people. Many Airbnb or short-term rental owners draw fulfillment from curating an experience that gives guests the ability to experience something new and interesting, or connect with the location in a unique way.

What’s more, homes or stays that are unique, or offer interesting opportunities to explore, gorgeous aesthetics, or offer a personalized experience for guests, tend to perform much better on these platforms (check out our article on unique stays for more). Guests quickly realize which hosts and properties have a lot to offer, and reward them with positive reviews, higher nightly rates, and higher booking rates.

Whether you currently have a property that you’re looking to list as an STR, or are just curious about the space, hopefully this has given you some idea of the benefits of doing so.

If you’re looking for a partner to join you in your journey, take the weight off, and start up level up your STR, get in touch with us, and we’re happy to help out.