Short-term or Long-term Rentals-Which is Better? Traverse City Rental Investing
Traverse City has variety of rental options. Because it is a tourist city, it has a large number of short term rentals. This is a popular Traverse City rental investment type. HOWEVER… there is a major difference between an investor doing an Airbnb and someone renting out a property long-term (12 months+). In this post we will discuss these two types of rentals in Traverse City, MI. In the end, you can decide which rental makes more sense for your investment plan.
The Two Types of Traverse City Rental Properties
Let’s start off with defining these two types of rentals. For the Traverse City rental market, it makes the most sense to define these as the city does for certification purposes. A Short-term Rental is one in which the renter leases for 31 days or less. A Long-term Rental is when a renter leases a unit for 32 days or greater. Now let’s get into some of the differences.
With Airbnb you will deal with constant cleanings. Be sure to have a great cleaner on hand! You are going to have people constantly moving in and out. Whether they stay one day, two days, a week, you will need to have the whole house cleaned between guests. With a long term rental, cleanings are only at turnover which could be every year or several years between.
Oversight of the Tenant
With a short term rental, you are going to have to monitor your tenant more closely. Because of all the move ins and move outs, you will have many interactions with a variety of people. With a longterm rental, the most interactions occur during the screening/move in, lease renewals, maintenance issues and move outs. The rest of the time, the tenants will want to enjoy their home in peace.
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For a Long term rental, your rent is steady, but only charged monthly. On the other side of it, you could potentially make a little more income when you rent out via Airbnb because you can charge a more per night. Of course this depends on you being able to fill your rental unit with guests and doesn’t account for expenses.
Because Traverse City is a tourist destination, it has an inspection program that is different from most cities. If your lease is less than 31 days, you are subject to an inspection program. So that means if you rent out your unit using Airbnb, you’re going to have several inspections. Now if you were to rent your Traverse City Rental for a minimum of a year or even 32 days+ there are not any Traverse City inspections. Let me repeat that again… There are not any rental inspections for Long-term rentals in Traverse City!
Expenses will be one of your biggest differences. For short term rental expenses, you can expect to pay for the house cleanings, all maintenance, all utilities, marketing, and guest relations. With a short term Traverse City rental, you will also need to think about snow removal and shoveling. Typically your biggest expense is at turnover with a long term rental. So the longer your tenant stays, the less turnover costs you will incur. On top of that things like utilities and maintenance requests may or may not be included with the rent amount.
Which Traverse City Rental Investment Type for You?
So, there you have it! You now know a few differences between the short-term rentals and the long-term rentals. Now that you are a little more educated to deciding what to invest in.
Which Traverse City Rental Does Access Manage?
The good news here is we love rentals BUT the bad news is we do not manage Airbnb or short term rentals in. We manage single family homes, condos, duplexes, and small to medium apartment communities in Traverse City.