CONS OF LONG TERM RENTALS

🔻Cons of Long-Term Rentals

🔻Less Earning Potential
As discussed before, short-term rentals can, in some instances, generate 30% more income than long-term rentals. That’s because, with a long-term renting arrangement, owners can’t adjust their prices based on seasonality or local events. Prices are set for the duration of the lease and can only be increased once a year (in a limited fashion).
🔻However, in the same way, owners can adjust pricing based on seasonality, demand will also vary based on the season or local events. This means that your earnings are highly unpredictable with a short-term rental and might end up lower than with a long-term rental arrangement.
🔻Payment Issues Are A Possibility
When renting your place for short periods, you’ll be protected by whatever platform you’re listing your property on in case of default on a payment.
🔻On the other hand, when you’re renting out long-term, you’re flying solo. This means that you can’t rely on a third-party organization to cover for your tenants. And even though you have legal options, it can take time for you to recuperate your losses, leading to cash flow problems. Now, this is something to think about, especially if you rely on this income to pay your bills and mortgage on the property.
In this scenario, working with a good property management agency can help reduce the risk of sourcing bad tenants.
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