Over the past few years, there has been a lot of excitement about owning a short-term rental as part of an investment portfolio. This marks a dramatic change from the traditional long-term rental model. As more travelers utilize vacation rentals instead of hotel chains for their trips, you may be wondering if owning a short-term rental may be the right situation for your needs.
Short-term rentals have caused a stir in many communities. Many full-time homeowners do not like having these properties in their neighborhood. Unruly vacationers often bring a party atmosphere to their quiet streets and some cities have banned them completely. In other areas, they are severely restricted in their use.
Another consideration is the amount of time a short-term rental will take to manage. Unlike their long-term counterparts, short-term rentals often require more repairs and maintenance as the tenants do not treat these properties as their homes, as long-term tenants do. Short-term rentals also require someone to be available 24/7 to address any needs of the guests. Of course, you can hire a property management company to handle these issues, but that will cut into profits and average 20%-30% of rents.
Short-term rentals can have a larger return on investment than long-term rentals, but they come with more work. They also have significantly higher vacancy rates, advertising costs, cleaning, and maintenance costs. On the other hand, having a vacation property you can enjoy yourself may tip the scale. There is no one-size-fits-all approach to real estate investing. Consider what works for you and make the best choice for your goals.
The East TN market is great for both short term and long term rentals. With rising interest rates and high inflation many buyers are unable to purchase a home making long term rentals very desirable. Coupled with relocation buyers who don't know where they may want to live there is a lot of demand for rental properties.
Similarly, being just an hour from the Smoky Mountains, short term rental properties are in high demand. Pigeon Forge and Gatlinburg are some of the most desired vacationing locations year round. Not just that, but visitors to Neyland Stadium for UT Football games make short term rentals downtown an attractive option for those that prefer a city dwelling.
In closing, if you are looking to purchase either a short term or long term rental I am here to help. As someone who has owned both I am happy to share the pros and cons of owning both types of properties.
And if you are just interested in a getaway from it all, consider checking out our Short Term Rental, Rocco Top Cabin in Harford, TN!