Long-Term vs. Short-Term Rentals in Florida

Marwest Property Management

June 20, 2023

Property Management

Maximizing Your Florida Property Investment: Long-Term vs. Short-Term Rentals

If you are thinking about acquiring some property in the sunny state of Florida, or maybe you already did, the first thing we want to do is say congratulations! Florida is known for its beautiful beaches, diverse population, and year-round warm weather, which makes it an attractive destination for both tourists and residents. With that out of the way, it’s time to address a very important question that you probably already thought of yourself: Should you opt for a long-term or short-term rental?

Long-term rentals generally attract tenants who are looking for a home for a year or more, while short-term rentals are generally rented out daily or weekly to vacationers or business travelers. Both options have their advantages and drawbacks, so it’s essential to weigh them carefully before making a decision. In this blog post, we’ll explore the pros and cons of each rental strategy, so you can make an informed choice that suits your Florida property, your budget, and your goals.

Long-Term Rentals

Before getting into the pros and cons of long-term rentals, let’s first discuss what constitutes one. Long-term rentals are leases that last around six months or more, usually for years. They are ideal for landlords (and tenants) who value security, consistency, and hassle-free renting. If you’re looking for a steady income stream for your investment, long-term rentals can be a good option. With long-term rentals, you can expect a stable monthly income, lower vacancy rates, and fewer turnovers. You don’t have to keep worrying about finding new tenants regularly, setting up the space for new arrivals, or dealing with vacationers’ demands.

Unlike short-term rentals, which are highly dependent on seasonal demand, long-term rentals tend to be unaffected by fluctuations in the tourism industry. Plus, long-term rentals typically require less work since you won’t have to constantly market your rental property and list it on booking sites, as well as less maintenance and upkeep because tenants will be responsible for most of the repairs and cleaning.

However, long-term rentals also come with some downsides. Firstly, you may have to compromise on the rental price, as long-term tenants expect a lower rate than short-term ones. Secondly, once you sign a lease agreement, you are stuck with the tenant for the whole term, even if they prove to be problematic or unreliable. Thirdly, long-term tenants use the property as their home, so it may undergo more wear and tear than if it were only used for vacations. Therefore, you’ll need to account for higher repair costs and replace furniture and equipment more frequently.

Short-Term Rentals

Short-term rentals have become increasingly popular in recent years, thanks to online platforms such as Airbnb and Vrbo. Basically, they are vacation rentals that can last from a few days to a few weeks and are ideal for landlords who seek flexibility, high earning potential, and a hands-on rental experience. Short-term rentals can be a very profitable option, particularly if your property is located in a tourist hub or near a popular event. With short-term rentals, you can charge a premium price during peak seasons, attract a variety of guests from all over the world, and personalize the space to suit each renter’s needs. You also have the freedom to use the property yourself or let friends and family stay on certain days, while still earning a generous income the rest of the year.

But not everything is rose-colored, as short-term rentals have their share of drawbacks. For starters, they require a lot of time and effort to market, manage, and maintain. You’ll need to advertise your rental on various platforms, respond to inquiries and bookings, collect payments, clean and prepare the space for each guest, and handle complaints and emergencies. Secondly, short-term rentals are subject to seasonal fluctuations, which means that your income may vary significantly from month to month. Thirdly, short-term rentals may face regulatory challenges and zoning restrictions in some areas, which limits your rental options and increases your legal risks. Because of this, we don’t really recommend anyone to jump into the short-term rental game without extensive research.

Hybrid Approach

Of course, you also have the option to pursue a hybrid approach, which combines both short-term and long-term rentals! Hybrid rentals are designed to capitalize on the benefits of both strategies while minimizing their drawbacks. With hybrid rentals, you can rent your property to long-term tenants during the off-season and shift to short-term rentals during the peak season, or rent your property to a mix of long-term and short-term tenants year-round. This strategy allows you to maximize your rental income while minimizing the risks associated with either option. Hybrid rentals give you more flexibility, earning potential, and simultaneous stability and vacancy, as long as you plan and manage them carefully.

To make hybrid rentals work, you’ll need to communicate your rental terms and availability clearly to both types of tenants, ensure that the rental price works for both parties, maintain the property regularly to prevent damage and wear and tear and comply with local regulations and laws. Hybrid rentals may require more time and effort to manage than long-term or short-term rentals separately, but they can also offer a more balanced and lucrative rental experience.

Both Short-Term and Long-Term Rentals Have Value

There’s no clear-cut answer as to whether long-term or short-term rentals are better for your Florida property investment. Whether you choose a long-term rental, a short-term rental, or a hybrid rental ultimately depends on your property, your rental goals, your budget, and your personal preferences. If you’re looking for a more consistent income stream, stable tenants, and less work, long-term rentals could be the right choice for you. Alternatively, if you want more flexibility, higher rental rates, and the ability to use your property when it’s not rented out, short-term rentals are the way to go. Or, you could take a middle ground and try a hybrid approach to reap some benefits from both rental types. Each rental strategy has its advantages and drawbacks, so you need to weigh them carefully and consult with a property management company that specializes in Florida rentals like Marwest Property Management. With the right strategy, you can maximize your Florida property investment and create a profitable and enjoyable rental experience for both you and your tenants. Happy renting!