At Summit Mountain Rentals, the majority of our business is managing short-term vacation rentals: rentals of a month or less in length. However, we do manage some long-term rentals: rentals with leases of a year or longer.
In a popular destination area like Summit County, most people purchase “vacation homes” with the intent of using them for what the term implies: vacations. But some owners consider transitioning their homes to long-term rentals for a variety of reasons. These can include:
- They (and their families) just aren’t using the vacation home as much as they used to.
- They aren’t willing (or can’t afford) to make the constant upgrades needed to keep pace in an increasingly competitive vacation rental market, e.g., replacing mattresses every few years, kitchen updates like granite counters, etc.
Here are some of the things vacation-rental owners should think about if they’re considering renting their property long-term. And, if you have any questions about the advantages and disadvantages of short-term and long-term rentals, feel free to call me. I’m always happy to help! (See contact info below.)
Advantages of long-term rentals
- More consistent cash flow — By nature, short-term vacation rentals are seasonal. For owners in Summit County, rentals (and rental revenue) are typically great in the winter months and good in the summer months. However, during the “shoulder seasons” — fall and spring — revenue falls off significantly. In contrast, long-term rentals deliver consistent, predictable revenue every month.
- Long-term renters often pay utility bills — This can vary, particularly in condos that have varying HOA rules and standards on how certain utilities are paid. But in many cases, long-term renters take on more financial responsibility for utility bills, resulting in savings for owners.
- Furnishings — With long-term rentals, owners have more flexibility in being able to offer properties either (a) fully furnished, (b) partly furnished, or (c) unfurnished. In Summit County, all options are attractive to certain groups of renters. If owners are converting a rental from a short-term to a long-term, it’s probably fully furnished — which is great for people moving here with little more than a suitcase. Partially furnished units work well for people who may have accumulated some furniture (e.g., a bed or bedroom set) but don’t want to furnish a whole condo or house. And more established renters with lots of furniture consider unfurnished rentals to be an advantage.
Disadvantages of long-term rentals
- Loss of your vacation getaway — Obviously, renting your home fulltime means that you can’t use it! This is probably the most important thing that owners must reconcile themselves with in transitioning to renting long-term.
- Payment issues — With short-term rentals, owner receive payment in advance of a guest’s stay. But with long-term rentals — especially if your renting your property yourself — you’re more likely to deal with late payments, bounced checks and other issues. And, if you’re letting a professional property management company handle your property, these problems rarely (if ever) occur.
- Limited access to your property — Even if you just want to “check on your place,” laws require that you must give long-term renters advance notice just to take a look — or even make necessary repairs.
Advantages of short-term rentals
- Vacations — Yes, you, your family and friends can use your home for the very reason you probably bought it: vacations. Just block out the time(s) you want.
- Less wear and tear — Homes that are occupied 365 days a year will likely to need more maintenance and repairs. And for short-term rentals, a good property management company will handle any needed maintenance and repairs, keeping your short-term rental in top shape.
Disadvantages of short-term rentals
- Upgrades — Over the past few years, the vacation rental market has changed dramatically. Guests now expect high-end amenities (upgraded kitchens, bathrooms and bedding; hot tubs; high-end TVs — you get the picture). If you’ve reached the point where you’re not willing or able to make these investments, consider going long-term.
- Managing your vacation rental — Let’s face it: managing a short-term rental is a lot of work! If you work with a strong, full-service property management company, you’ve eliminated most of that work. But if you’re doing it yourself, you know the time and work that marketing, dealing with guests, taxes, cleaning and maintenance entails.
Long-term rentals: benefitting the community
There’s another aspect to long-term rentals that some property owners find satisfying: the need for long-term rentals for resort-area workers. In Summit County, it’s tough for fulltime workers to find housing. Putting your vacation rental into the long-term rental pool helps assure that the people needed to make our area “tick” — resort employees, hotel and restaurant workers, public employees and more — can afford to live and work here.
Obviously, there are many factors in the decision between renting short-term and long-term. And as I mentioned earlier, if you need help in weighing those factors, give me a call. Here’s my number:
Mark Waldman, Owner, Summit Mountain Rentals, 970-423-7382