In the ever-changing real estate landscape, investors often hesitate between long and short-term rental models. When you want to maximize your performance while minimizing hassles, the choice of model is very important.
But how do you make this strategic choice? This article invites you to explore in depth the key differences between these two rental methods, highlighting their respective advantages and disadvantages.
We love it? To provide you with the knowledge and insights you need to make an informed decision that is aligned with your goals and needs as an investor. Whether you are an experienced owner or new to the rental world, we help you optimize your investment for the future.
Short-term rentals are stays of a few days for passing customers. It offers flexibility and a high potential for profitability.
This investment model attracts with its numerous advantages, including the possibility of generating a higher income compared to the residential market, while maintaining the assets in excellent condition through regular maintenance. Owners can benefit from the availability of their property for personal use, from a long-term valuation of the property, from a very favorable taxation system. Above all, when an investment in LCD is well orchestrated, it generates an excellent ROI.
However, investing in LCD also means facing challenges. Managing a short-term rental requires greater attention, in particular to meet the needs of tenants, ensure rotations and manage reservation calendars (especially when an announcement is online on several platforms). Local regulations may also impose specific restrictions (Discover our article on the rule of change of use). And seasonality and competition on booking platforms require a well-thought-out pricing and marketing strategy to stand out.
Long-term rentals involve the signing of leases that generally last for years. It is prized for its stability and ease of management. Indeed, once the tenant is in place, there are no frequent rotations to manage. It provides a steady and predictable source of income, making it an attractive option for homeowners looking for financial security.
However, investing in long-term rentals has its drawbacks. If management is simplified, rental income is much lower than that generated by short-term rentals. There is also less flexibility in case of personal projects requiring access to the property or its resale, and increased risks associated with long-term relationships with tenants, including late payments or even unpaid bills.
When it comes to choosing between short and long term rentals, there are several crucial factors that should guide your decision. First, your investment objective plays a decisive role: are you looking for maximum income or are you looking for financial stability?
Second, availability for property management is critical. Short-term rentals, while potentially more lucrative, require more time and effort in terms of daily management, marketing, and maintenance.
The location of your property also influences the choice: properties located near major tourist sites, events, or business centers may benefit more from short-term rentals.
Finally, it is vital to assess local real estate market trends. Is it a developing market? Will you be able to make a nice gain by reselling the property?
All these parameters to take into account are not available to everyone and above all, the investor lacks the time to devote to the life of his property. This is why it is important to rely on LCD experts to build your investment project and delegate the management of your accommodation.
To illustrate this article, let's take a concrete example with a hosting that we manage. This is a 31m² studio, ideally located in the heart of Narbonne. This investment has been perfectly thought out: location, typology, equipment, traveller target and experience. Indeed, it is classified in the Love Room category (Discover our article on the boom in these themed accommodations).
Based on our market study, we were able to estimate the income of this property. In long-term, unfurnished rentals, the accommodation would have brought its owner €5,400 in net annual income. In a furnished long-term rental, it would have generated a net income of €7,200 per year. For short-term rental managed by our teams, this property brought its owner €14,700 in one year. We'll let you do the math!
In conclusion, choosing between short and long term rentals depends on a variety of factors. Before making a decision, it is crucial to carefully assess your long-term investment needs and goals. Experts and specialized platforms such as OIQIA can support you in this process. Entrust your property to us and we will build the strategy to successfully create the success of your investment.
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