PORTLAND, Ore. – Your friends, family members, and co-workers may own Portland Oregon rental property and are telling you that you should turn your rental property into a vacation rental but, you’re still not sure if a short term rental is actually better than a long term rental property.
You’re not alone in being cautious about the profitability of vacation rentals. In this article, we will break down the truth about short term vs. long term rental property just so you will know without a doubt which option is the best one for your portfolio.
The Truth about Vacation Rentals
Even though they look sexy, and many people are choosing to turn their Portland Oregon rental properties into vacation rentals especially during the winter months, when tourism explodes here thanks to skiing and snowboarding, vacation rentals are not everything they are cracked up to be.
In the last year alone many cities across the United States have begun to push back against vacation rentals and are going as far as imposing heavy fines on owners if they are not following laws and rules regarding vacation rentals in their cities.
The truth about vacation rental properties is that unlike long-term rental property it’s not always easy for a landlord to conduct a professional background check, credit check, or eviction check, on a potential renter, especially when the renter wants to rent their property within 24 hours or less so most owners of vacation rentals don’t really know who they are renting to.
Many landlords are also becoming aware of the high cost of owning a vacation rental property after the fact, especially when they realize that they also have to provide a concierge service for hotel guests and incur more costs just to keep their vacation rentals competitive and desirable than others in the area.
What Are the Costs?
Management Fees – A typical vacation rental company like Airbnb.com charges a management fee that ranges from 20 to 35%, depending on the area and time of year, that you are renting your vacation property out.
Utility Costs – Another common fee that’s not talked about among people who own vacation rental properties are the utility costs. Depending on the time of year utility costs can run up to $500 per month especially since the average individual who wants to rent a vacation rental property will also require Internet, phone and basic cable. Unlike traditional rental property where these costs were paid by tenant, the owners who owns the vacation rental property has to pay the utility costs every single month, regardless if their unit is occupied or not.
Cleaning Costs – People who own vacation rental property also have to pay cleaning costs just so their rentals are professionally cleaned and prepared for the next tenant after they are rented. When you add cleaning costs plus money paid for restocking the rental with things like toiletries, paper goods, coffee and other amenities that are expected to be in a vacation rental, these costs can easily add up to $6,000 per year.
Why Long Term Rentals Are Better
Long term rental properties are always a better investment for the landlord who wants to make a consistent ROI from the rental properties especially for these reasons:
- Consistent Cash Flow – Since the average lease is typically one year; this is cash flow that an owner can count on month after month, unlike vacation rental property which is not always consistent rental income because the success or failure of the rental property can depend on upon the time of the year when it’s being rented, the economy, and so much more
- No extra expenses – Although you’re going to have to pay for maintenance and upgrades to your rental property over the years that you own it, one of the huge benefits of owning a long-term rental versus a short-term vacation rentals is that you won’t have to worry about keeping furnished, paying to have it cleaned each month, restocking, or the other long-term expenses that come with owning a vacation rental property because your tenant will pay for those expenses.
- Tenant Pays Utilities – Last of all, but most important, the biggest benefit of all that comes from owning a long-term rental property in Portland Oregon or elsewhere in the United States is that the tenant pays the utilities.
Get Property Management For Your Portland Oregon Rental Property
For affordable property management for your Portland Oregon Rental Property, contact Property Management Systems today by calling (503) 515-3170 or click here to connect with us online.