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Choosing the Right Rental Strategy: Long Term, Mid Term, or Short Term?



When it comes to renting out your property, deciding on the optimal rental strategy can be challenging. Whether you should opt for long term, mid term, or short term rentals depends on various factors, including your financial goals, property location, and personal preferences. In this blog post, we’ll delve into the benefits and drawbacks of each rental type to help you make an informed decision.


Long Term Rentals

Pros:


Stable Income: Long-term rentals typically involve lease agreements of one year or more, providing a consistent and predictable income stream.

Lower Turnover: With tenants staying longer, you spend less time and money on marketing, cleaning, and tenant turnover.

Less Wear and Tear: Fewer move-ins and move-outs mean less wear and tear on your property.

Cons:


Limited Flexibility: Committing to a long-term lease can restrict your flexibility if you decide to sell or repurpose your property.

Tenant Risk: A problematic tenant can be difficult to evict, and issues can persist for the duration of the lease.

Rent Control Regulations: In some areas, long-term rentals may be subject to rent control laws, limiting your ability to adjust rent prices.

Mid Term Rentals

Pros:


Flexible Leases: Mid term rentals, typically ranging from one to six months, offer more flexibility for both landlords and tenants.

Higher Rental Rates: Compared to long-term rentals, mid term rentals can often command higher monthly rates, especially in desirable locations.

Ideal for Specific Tenants: These rentals appeal to traveling professionals, temporary workers, and students, providing a niche market.

Cons:


Increased Turnover: More frequent tenant turnover compared to long term rentals means additional time and expenses for cleaning and marketing.

Variable Occupancy: There may be periods where your property sits vacant between tenants, leading to potential income gaps.

Management Intensive: Managing mid term rentals requires more effort in terms of tenant communication and property maintenance.

Short Term Rentals

Pros:


Higher Income: Short term rentals, such as vacation rentals, yield significantly higher nightly rates than long-term rentals, especially in popular tourist destinations. We calculate a 2-4x increase in revenue vs. your monthly mortgage payment.

Flexibility: This one is huge. You can use the property for personal use when it’s not rented out. Friends and family in town? No problem. Looking to book a weekend away for yourself? No problem. Being able to use your investment property holds a lot of personal value.

Wear and tear: Despite the common narrative that short term rentals can be tough on your property, we've found that cleaners being in your property 2 to 4 times per month leads to your property actually stays in better shape than a longer term rental. Think of it, a longer term tenant might not clean your place once until they are contractually obligated to until they move out.

Cons:


High Turnover: Frequent guest turnover means more cleaning, maintenance, and administrative work. This is one of the main reasons why landlords contract company's like ours. So don't worry about it! We'll take care of this for you.

Seasonal Variability: Income can fluctuate with seasonal demand, leading to potential income instability.

Regulatory Restrictions: Many cities have strict regulations on short-term rentals, which can limit your ability to operate and impact profitability.

Conclusion

Choosing between long term, mid term, and short term rentals depends on your individual circumstances and goals.


Long term rentals are ideal for those seeking stable, passive income with less frequent management demands. Mid term rentals offer a balance between flexibility and higher income potential, suitable for areas with a steady influx of temporary residents. Short term rentals can be highly lucrative in the right market but require active management and an understanding of local regulations.


Ultimately, understanding your target market, property location, and personal investment style will guide you to the right rental strategy. Each approach has its unique set of advantages and challenges, so weigh your options carefully to maximize the return on your investment. Reach out to us and we'll help guide you through the process in making the right decision! Email jon@guesthaus.ca

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