The Short Term Rental VS Long Term Rental Debate Is Settled

The short term rental vs long term debate has been settled, once and for all. Short term rentals are better! Just kidding, but not kidding. This is a blog dedicated to short term rentals so I am slightly biased but I do believe I make some excellent points in favor of both sides so hear me out. 

For those that may think short term rentals are new and are only adding to the housing crisis, they are dead wrong. Vacation rentals have existed for decades and there’s a place for both in every market. Hear me out and let me know if you change your mind by the end of the article.

This post is all about short term rentals vs long term rentals.

The Showdown: Short Term Rentals vs Long Term Rentals

Let me break this down by the main arguments I hear when it comes to negative conversation around short term rentals.

1. Short term rentals are the reason there’s a housing crisis

This is just simply not the case. Did you know that Airbnb rentals only make up 1.5% of the total housing available in the USA? There are 2.25 million Airbnb listings in the USA and 144 million homes. This data is as of 2022. There has been a significant increase in Airbnb properties available (upwards of a 500% increase) but it’s still such a small portion of the overall housing available in the US. Also, most of these Airbnb listings are in vacation markets where the majority of listings have been vacation rentals for decades upon decades.

2. Long term rentals are just easier to manage

This is what so many people think if they have chosen to self manage their rental properties. If you are new to the Airbnb space, you would think this is the case. I mean you would deal with multiple guests over the course of a year versus just one tenant, maybe two if you had turnover. But this is not true! Everything about Airbnb can be completely automated. And I would argue that absolutely nothing about tenant communication can be automated in a long term rental management strategy.

I’m currently building out a digital product that will take you through my exact strategy for building an Airbnb business that runs on autopilot and can be done completely from your phone. If you want to know my secrets to running an Airbnb business on autopilot, while working a full time job, being a wife and mom to 3 kids 3 and under, you have join my email list below. The people who submit their emails below will be the first to know when this new product offering is live!

3. Airbnb’s take a ton of time and money to start up

Ok this common objection to Airbnbs/short term rentals might actually win. There is a ton of time and money that go into starting up an Airbnb. For furnishing an Airbnb, you will need to invest around $10-$15 per square foot of living space. That can add up QUICK. But I will say the difference between a short term rental and a long term rental here is that by buying a short term rental you are most likely buying a better long term investment. Hear me out.

A short term rental is usually a vacation rental and people typically like to vacation in A class neighborhoods. So if you’re buying a property for a vacation rental you are usually looking in better neighborhoods versus a long term rental where you would be willing to buy in a B or C class, maybe even D class neighborhood to boost your cash flow. The big difference here is the value of the asset over the long run. The asset you bought in that A class neighborhood is usually going to appreciate more over the long run and build more wealth for you in the long run versus the asset in the C or D class neighborhood.

4. The management fees of short term rentals are insane

Yes. Yes the management fees are nuts. Long term rentals typically charge 10% of monthly rents and short term rental managers will charge upwards of 25% of monthly revenues as a management fee. Usually you want to buy a short term rental that is going to do 2.5x the monthly long term rents so this is going to be a massive amount of money. All for a property manager, who honestly, is not going to do a great job anyways.

I always advocate for self management and I have really perfected that over the last 5 years hosting on Airbnb. I am going to be coming out with a product that will take you through my exact strategy for running an Airbnb on autopilot. You have to drop your email below to get on the list for when it launches!

5. Guests are crazy, I’d rather deal with one tenant

Guest can be crazy, but guess what. Tenants can be crazier! My last long term tenant was a nightmare and that was the final push I needed to go all in on Airbnb. They were a couple that ended being in a domestic abuse situation. We helped the women get out of the house safely and reported the boyfriend to the authorities. Long story short, she was able to move into a safe house and get the help and recovery she needed to move on.

But that was the last straw for us. We furnished that house and every other property we’ve purchased since then and have been all in on Airbnb. Guests that are highly rated are easy to deal with and 90% of them never even reach out! They just get all the information they need from the listing and message series we send and they are happy campers. And clean up when they check out. It’s truly a dream.

What do you think is better? And did I change your mind about short term rentals? Let me know in the comments below!

This post was all about short term rentals vs long term rentals.