If you are planning to invest in a rental property, one of the first things you need to decide is whether you want to rent that property out in the short term or the long term. There are pros and cons to each option, and you need to carefully consider all aspects before making a decision.
Let’s explore the benefits and drawbacks of each choice and help you make an informed decision that suits your investment goals and meets the needs of the Alhambra rental market.
Short-term Rentals in Alhambra
Short-term rentals, also referred to as vacation rentals, are typically of 30 days or less. They offer a higher rental income in a shorter period compared to long-term rentals. This is California, and because we’re a popular rental destination, it’s easy to earn decent rental income during busy tourist seasons. Short-term rentals can provide a more flexible schedule for you as a landlord if you prefer to use the property when it’s not being rented out.
The downsides of short-term rentals include a fluctuating occupancy rate (it’s hard to reach 100 percent occupancy), a higher tenant turnover rate, and larger maintenance costs because of accelerated wear and tear.
Long-term Rentals in Alhambra
Long-term rentals offer a much more stable occupancy rate because your tenants will rent the property for a year, and even longer if they renew their lease agreements. This provides you with steady monthly income, and you’ll likely experience generally fewer tenant turnovers. You’ll save money on marketing costs because you aren’t constantly looking for a new renter.
Landlords who choose long-term rentals will typically have to deal with fewer maintenance issues and costs due to more stable occupants and fewer move-ins/move-outs. However, long-term rentals can tie your unit rental price to the market, which can result in lower rental income compared to short-term rentals.
Legal Requirements for Long and Short-Term Rentals
Short-term rentals are highly regulated, with specific requirements such as obtaining operating permits, tax compliance, and minimum stay restrictions. Conversely, long-term rentals are generally more straightforward and void of stringent rules and stipulations. However, landlords renting out long-term rental homes will have to follow the strict tenant protections that are in place. You may face rent control restrictions and you’ll have to know the laws around evictions, security deposits, and habitability tankards.
Whichever option you choose, research and understand the relevant laws before investing in a property to avoid costly legal consequences.
Property Management and Alhambra Rentals
Managing a short-term rental has more moving parts than managing a long-term rental since tenants stay for shorter intervals. With short-term rentals, you must clean and prepare the unit after each stay, maintain the cleanliness of the property, and coordinate check-ins and checkouts regularly. Marketing and advertising are more costly when running a short-term rental business compared to long-term rentals. Conversely, when managing a long-term rental, landlords only need to periodically check up on the tenant, make repairs as necessary, and receive monthly rental-income.
Choosing between short-term and long-term rentals can be tricky, and it really depends on your investment goals and what you have planned for your property. There is no one-size-fits-all rule for all investors. Weigh the risks, benefits, and legalities while identifying your investment objectives to make an informed decision that works for you.
If you need to talk through the options, we’d be happy to offer our best advice based on our Alhambra property management experience. Contact us at ZenPro Property Management.
