Since the late 2000s, short-term rentals have been gaining popularity. More landlords are exploring their options between long-term leases and short-term rentals. Choosing the right rental strategy is crucial. It affects your income, management workload, and the overall success of your property investment. Whether you want consistent cash flow or higher short-term earnings, understanding these models can help you make an informed decision.

At Ferguson Property Management, we help landlords understand the key differences between long-term and short-term rentals. We also help you weigh the benefits and challenges of each so you can choose the strategy that best aligns with your property and goals.

Understanding Long-Term Rentals

Long-term rentals typically involve leases that last six months to a year or more. This traditional approach offers stable, predictable income and lower tenant turnover.

For landlords seeking consistent cash flow, long-term rentals are often ideal. They reduce the time and effort spent on marketing, tenant onboarding, and turnover-related maintenance. Plus, long-term tenants tend to take better care of the property as their home.

Understanding Short-Term Rentals

Short-term rentals are furnished properties leased out on a daily, weekly, or monthly basis. This model has surged in popularity with platforms like Airbnb and VRBO making it easy to reach travelers and short-term tenants.

The main advantage of short-term rentals is the potential for higher income. Because you can charge nightly rates, especially in high-demand or tourist areas, your earnings can surpass what traditional leases offer. Plus, short-term rentals provide landlords with flexibility to use the property themselves when it’s not rented. However, the drawback of short-term rentals is less sustainability and less consistency. 

Short-term rentals can be a risky and demanding investment for landlords. While they offer the potential for higher income, the frequent turnover of tenants leads to increased maintenance and cleaning costs. The unpredictability of income, combined with the hassle of compliance and constant property upkeep, makes short-term rentals a less stable option for landlords seeking long-term, reliable income.

Comparing the Financials

Understanding the financial differences is key when deciding between long-term and short-term rentals.

Short-term rentals often generate more monthly income, but this revenue can be inconsistent due to fluctuating demand and vacancy between bookings. For example, properties located in vacation hotspots, such as a lakefront area, can see a significant increase in demand during peak seasons like summer. However, landlords may struggle to fill vacancies outside of these high-demand periods, leading to inconsistent yearly income. In contrast, long-term rentals provide steady, predictable income over the lease term, which can simplify financial planning. With mortgage bills to pay, having a consistent cash flow from long-term rentals allows for more peace of mind, knowing you have a definite amount coming in.

Additionally, taxes and licensing fees for short-term rentals can be more complex. Many cities require special permits, collect transient occupancy taxes, or enforce strict regulations. Long-term rentals generally face fewer regulatory hurdles, making compliance easier.

Time Commitment and Maintenance

When it comes to time and effort, long-term and short-term rentals demand very different commitments from landlords. Long-term rentals generally require less work, only dealing with one tenant, while short-term rentals have to deal with dozens, if not more, throughout an entire year, which can be exhausting. The wear and tear of a short-term rental is usually higher than long-term due to the constant turnover of renters and it not being their place of residence.

How Property Managment Can Help

Managing either long-term or short-term rentals can be complex and time-consuming. That’s where professional property management companies come in. At Ferguson Property Management, we offer stress-free support for long-term rentals by handling tenant communication, maintenance requests, rent collection, and legal compliance on your behalf.

With our expertise and guidance in long-term rentals, Ferguson Property Management helps landlords choose the rental strategy that best fits their property type, location, and financial goals.

We streamline the entire process—from marketing your property to managing it—so you can enjoy the benefits of rental income without the day-to-day hassle.

Choosing the Right Strategy for You

Your ideal rental strategy depends on factors like property location, your financial goals, and how involved you want to be as a landlord.

By carefully weighing these pros and cons, you can make informed decisions that maximize your investment’s potential. Although short-term rentals have their pros, long-term rentals are a tried and true method. For expert guidance on long-term property rentals, reach out to Ferguson Property Management. We’re here to help you find the best approach and ensure your rental success.