Vacation Rentals - What They Are And How They Work

One of the biggest factors in short-term rental growth is the emergence of what many call “leisure,” or the fusion of business and leisure travel. As the remote work revolution has continued to take the corporate world by storm, many remote workers have new opportunities to extend their stays in unique places. 

Short-term rentals are perfect for these extended stays as they offer more amenities and feel more like home than a hotel. 

Additionally, short-term rentals are often owned by real estate investors or small businesses rather than massive hospitality-focused corporations such as Hilton. This means a lot for conscious consumers. Due to the growing inequality in our world, people want to support small businesses over corporations. 

Owners of short-term vacation rentals have seen significant growth, especially in small cities and rural locations. In fact, 2023 Q1 numbers, as reported by AIRDNA, show that short-term rentals in small cities and rural locations increased by 24% while hotel growth did not change. 

While short-term rentals can be a lucrative business, the investment is not without shortcomings. For one, keeping a short-term rental regularly and turning over customers can be a lot of work. Marketing a short-term rental can prove to be a challenge, especially as the economy continues to inflate, causing vacationers to be more careful about their spending.

Short-term rentals are also often seasonal and require more care throughout the year. Property owners with short-term rental units will need to regularly clean and reset these units to prepare for new customers. 

Regardless of all of the pros and cons of short-term rental units, they can be a good option for real estate investors that have the time to spend marketing and keeping the space in tip top shape.

Long-Term Lease - The Bread And Butter Of Any Real Estate Investor’s Portfolio

While short-term rentals are a great way to make money, long-term leases are the way to go. Long-term leases are stable and require far less marketing and work. While they may not be as lucrative, you can expect to get paid regularly throughout the entire lease term. 

Benefits Of A Long Term Lease

Truthfully, long-term leases are much easier for investors looking for a more hands-off approach to real estate investment. This allows landowners to manage multiple properties, each making a very passive income for the owner.

Some of the major benefits of long-term leases include:

For Tenants

• Stability: Long-term leases provide tenants with stability and predictability in their housing or business location.
• Budgeting: Fixed rent payments make financial planning easier, as tenants know their costs in advance.
• Customization: In commercial leases, tenants may have the opportunity to customize the space to fit their needs.

For Landlords

• Steady Income: Long-term leases provide landlords with a steady and predictable income stream.
• Reduced Vacancy: With a long-term lease, landlords reduce the risk and costs associated with frequent tenant turnover.
• Less Management: Long-term leases often require less day-to-day management compared to short-term rentals.

Key Factors Of A Long Term Lease

Long-term leases offer tenants and landlords a stable rental agreement that typically spans multiple years, typically ranging from one to five years or longer in commercial settings. These leases often establish a fixed rent amount for the entire term, ensuring both parties can predict costs reliably.

Many long-term leases also include options for renewal at the end of the term, allowing for flexibility with potential rent adjustments or lease term changes. Responsibilities and maintenance duties are clearly outlined in the lease, specifying that landlords typically handle structural repairs while tenants are responsible for routine maintenance and minor repairs.

Additionally, leases may include provisions regarding property modifications or improvements, often permitting commercial tenants to enhance the space with stipulations on ownership or removal of improvements at lease end.

Termination clauses are detailed to specify conditions under which the lease can be ended, such as breaches of contract, failure to pay rent, or other specific circumstances, ensuring clarity and protection for both parties involved.

Working With A Property Management Company

Regardless of how you plan to rent your property, working with a property manager is the answer to keeping things simple and compliant. With so many laws and local regulations to follow, as well as all of the work needed to market and manage a rental property, it is no wonder that many folks stay far away from real estate investment. 

However, when you work with a property manager, they play a crucial role in managing real estate investments on behalf of property owners or investors. They handle various responsibilities that ensure properties operate smoothly, maintain their value, and generate income. Here are some key tasks property managers typically take care of for real estate investors:

• Tenant Relations: Property managers are responsible for finding and screening tenants. They advertise vacancies, conduct tenant screenings (including background checks and credit evaluations), and handle lease agreements. They also address tenant inquiries, concerns, and requests, ensuring a positive tenant experience and tenant retention.
• Rent Collection: One of the most important aspects of owning a rental property is collecting rent. Property managers set rent rates, enforce lease terms regarding payment schedules, and follow up on late payments. They may also initiate legal proceedings for evictions if necessary, ensuring consistent cash flow for the property owner.
• Property Maintenance and Repairs: Maintaining the property's physical condition is a critical responsibility of property managers. They coordinate routine maintenance tasks such as landscaping, cleaning common areas, and HVAC servicing. Additionally, they handle emergency repairs and manage relationships with contractors and maintenance personnel to ensure timely and cost-effective repairs.
• Property Inspections: Regular inspections are conducted by property managers to assess the condition of units and common areas. These inspections help identify maintenance needs, safety hazards, or lease violations. Property managers may also perform move-in and move-out inspections to document property conditions and manage security deposits.
• Marketing and Property Improvement: Property managers develop and execute marketing strategies to attract tenants and maintain high occupancy rates. They may recommend property improvements or renovations to enhance property value and appeal to prospective tenants. These improvements can range from cosmetic upgrades to energy-efficient installations.

How Asheville Phoenix Properties Can Help You Manage Your Long-Term Lease

Asheville Phoenix Properties provides a comprehensive range of property management solutions designed to circumvent typical landlord pitfalls. By choosing us as your property management ally, you'll encounter fewer challenges, enjoy increased financial gains, and rest assured knowing your investment is well-managed.

Reach out to us today to discover how we can assist you in navigating the intricacies of owning long-term rental properties and turning your investment into a successful, stress-free endeavor.