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Today, long term rentals are popular. They’re used by everyone from solo vacationers and traveling workers to families who want a change of scenery.
If you’re thinking of investing in a property, a long term rental is an efficient way to produce consistent, positive cash flow. It comes with a range of benefits and once you know how to begin, it can offer a more reliable stream of income than its short term rental counterpart.
But exactly what is a long term rental, what are the benefits, and how do you start your own? We’ll cover that and more in our informative guide. Whether you’re a new investor just getting going, or a seasoned professional looking to break into the world of long term lets, we have you covered.
A long term rental property is often rented out to a long term tenant for a long period of time. This can range from 30 days to 6 months (or more) depending on the landlord or the property management company.
A long term rental may come with or without furniture and may be used for vacation, work relocation, or for people who are in-between homes.
Compared to a short term rental property, a long term rental can provide an immediate sense of relief for its tenants. It can give a “home-away-from-home” feeling and fill in the gaps when something unexpected comes up.
Generally, long term rentals mean less turnover, more consistency, and hopefully, less of a headache.
Whether you’re looking to start an Airbnb rental, VRBO, or you’re going with a property management company like Zeus Living, there are plenty of benefits of a long term rental.
In real estate, a vacation rental is seen as a lucrative rental strategy. There are various types of long term rentals, from those that are turn-key and fully furnished to those that require a bit more effort.
Now that we’ve answered, “What is considered a long term rental?” — let’s take a look at its benefits. From consistent income to tax breaks, let’s take a look at some of the ways landlords benefit from long term rentals.
When it comes to a vacation rental vs. long term rental, one of the main benefits of renting long term is consistent income. With a short term vacation rental, the income can be sporadic. You may find yourself renting the house or dwelling unit out for a week during spring break or the occasional weekend here or there. If a tenant is looking for a long term living solution, this means the property owner has full occupancy all the time (or at least, for a long period of time), which generates a steady income.
If you’re a real estate investor working within the rental market, debt from an investment property or two can accumulate fast. A long term rental offers the chance to be more hands-off than a short term rental does. Because of consistent and positive cash flow, you’ll be able to pay off debt quicker, which will help you to invest in more properties (and gain further income). Not only can cash from a rental property help to pay off your mortgage, but it can help in all other financial aspects, too. Whether it’s saving for retirement or paying off credit card debt, a long term rental can be the path to financial freedom.
Positive cash flow is the end goal for a long term rental property. Of course, you most likely also want your tenants to be happy and to create a positive living arrangement. But if you can generate positive cash flow with your long term rental property, both you—and your long term tenant—will be happy. To achieve this, you want to ensure that you’re making a profit after you’ve paid the expenses from your rental property.
Becoming a landlord comes with its share of tax breaks. For example, landlords can deduct travel expenses related to rental activity, such as driving to your rental property to handle something with a tenant. The cost of repairs is fully deductible such as replacing broken windows or fixing gutters or leaks. Interest is commonly the biggest deductible expense, like mortgage interest payments or loan and credit card interest that they’ve acquired due to rental activity. If you’re interested in hearing more about this particular section, check out this article from Nolo.
Now that you’re a bit more familiar with what is a long term rental and what are the benefits, you can consider starting your own journey to real estate investing. It might feel intimidating at first to dive into the real estate world with a long term let, but there are plenty of things that can help you out along the way.
Your rental property is your business. And like any brand, it’s good to define it. Maybe as a property owner, you specialize in tiny seaside cottages or cozy retreats in the snow. You might be more inclined to go for city apartments than you are for a rural farm stay. The key is to define your brand, give it a name, and work to engage your potential tenants.
Discovering your target market is an important part of knowing how to find renters. Some renters may be in the area longterm for school, and if you have a property close to campus, this is ideal. Others may be coming to the area for work, and need easy access to public transportation. If you know your target audience, you can more successfully market your investment property’s own unique amenities.
The details of a long term rental can be one of the more laborious parts of being a landlord. You’ll need to figure out things like the ideal cost of renting and what fair market rate is in your area. There are certain property management licenses and permits you may need to obtain depending on your location. These details can feel cumbersome, but once you’ve figured them out, the sky's the limit for your rental unit.
As you begin your home rental business, you’ll also want to map out your budget and expenses. Aside from the property purchase itself, here are some standard expenses to keep in mind:
Creating a social media presence and a website for your rental property is a great way to dive into long term rentals. It’s doable to move from tenant to tenant without it, particularly if you’re going more toward the route of traditional rentals. An online presence doesn’t only help to organically spread the word to potential tenants, but it gives a reference point for past renters to send along to their friends and family (which can help to generate more business in the future and make your property stand out in the rental market).
As you embark on your landlord journey, it’s a good idea to do a bit of research on how to furnish a vacation rental home. Whether you’re making sure to include all the kitchen essentials or creating a cozy living room environment, tenants will appreciate the thoughtful touches and attention to detail. With a long term rental, try to keep things clean, minimal, and efficient. Each piece of furniture, linen, or appliance should serve a purpose and overall, benefit your tenant.
When you have your brand and business all set up, it’s time to promote. There are several ways you can promote your rental, including bulletin boards in local shops, newspaper advertisements, word of mouth, and “for rent” signs. There are also a handful of rental sites that can help you to promote as well so you can fill any occupancy.
One of the hardest things as a landlord is figuring out how to deal with residents who don’t fulfill their end of the agreement, or wondering if you’re going to have to answer your phone for a 2 am emergency. Partnering with a property management company to manage all things from increasing occupancy rate to designing the perfect living space within your rental might be the answer for you.
With Zeus, you can enjoy full-service property management and care without lifting a finger.
When you sign a revenue-share lease with us, we take care of your home and property as if it’s our own. We design. We furnish it. And we rent it out for long term stays, all the while ensuring that it’s kept in pristine shape.
Many real estate investors and landlords turn to Zeus for peace of mind. Not only do we take care of your property, but through a rigorous screening process, we find you the perfect residents.If it’s a hands-off approach you’re looking for, we’re here for you. Property management can be a lot of work, but if you divide the load, it’s much easier.