A short-term rental is going to be a rental that you rent out to one tenant for 28 days or less. You could rent out part of your primary residence during a few times of the year, or you can get an investment property and then earn extra income from it. If you have ever stayed at an AirBnB, then you have seen what a short-term rental is. But if you are considering this as an investment for your needs, you may wonder whether a short-term rental is profitable or not.
A short-term rental can be very profitable. According to Park Place Property Management, a leading Airbnb property management company that can help people find a short term rental in Toronto, depending on the area where the property is located, it can be three times more profitable compared to a traditional lease. You also don’t have to worry about long-term tenants and handling evictions and other issues along the way. You will have to do a lot of marketing and have good property management in the beginning to get the rental up and running, but a short-term rental can be a profitable real estate investment.
There are many areas where short term rentals will be profitable. If you would like to get into the real estate business but worry about being a landlord and how that will work, then short term rentals will work well. Let’s take a look at some of the benefits of short-term rentals and whether they will be profitable for you.
Can I Make Money with a Short-Term Rental?
There are a lot of different methods that you can use to help you make money in the real estate. One method that you may want to consider is doing short-term rentals. These are rentals where the tenant, or the person who is renting it out, will stay for 28 days or less. This could be for a few days, or even a few weeks, for a long vacation, while moving into a home, or for many other reasons.
This can provide a unique housing opportunity, and if you are in an area that gets a lot of travelers, but doesn’t have a lot of options outside of hotels, you may find that this is able to provide you with a good amount of income as well. In fact, it is estimated that a short-term rental is able to bring in three times the profits of a traditional lease. And you don’t need to deal with any long-term tenants staying in the property either.
How Can I Make More Money on a Short-Term Renal?
There are a few steps that you will need to take to make sure that you can make some money on your short-term rental. It is not enough to just purchase a property and call it good. You will need to put in some more work to make sure others can find the property and will use it so you can make money. Some of the steps that you can choose to help make the short-term rental more profitable include:
- Put in some work: You will need actively manage the rental and make sure that it stays up to date and looking nice. You will need to price competitively to get more people in the door. And you will need to market well to ensure that others are able to find you.
- Find the right location: These short-term rentals are not going to be profitable everywhere. Yes, you could find a nice house for a good price, but if it is in the wrong area, no one will rent it. Do some research and find areas where you will be able to rent out the property more often.
- Optimize your daily rate: When you do a traditional rental, you will need to stick to a fixed monthly rate for the whole time of the lease. But with a short-term rental, you will be able to change the rate as much as you want. This allows you to move it up and down based on the amount of business you get and can bring in more money.
- Check out your guests before confirming the reservation. This helps make sure that you get good tenants into the door, rather than getting someone who will trash the place and costs you more time and money.
Choosing to Invest in a Short-Term Rental
There are a lot of factors to consider when it comes to purchasing and leasing out a short-term rental. It is not going to work for everyone, but for those who are ready to put in the work and can choose a property in the right area, it can help them to make a second income while providing some of the housing people need on a short-term basis. These can make a good amount of income, providing you with the income you need!