Duplex - Short-term and Long-term Renters in same Building?

Question

I am looking at a duplex in a vacation destination. One unit is currently rented on a 12-month lease and the other unit is vacant. My ultimate plan is to do short-term rentals for both units. But with the current tenant in-place it got me thinking about doing one unit short-term and one unit long-term. The units are side-by-side with their own entry and driveway. In theory the idea seems great - diversified income streams with one tenant paying consistently while the other half ebbs and flows with short-term renters. But in practice I can see the issues - short-term renters are too loud for long-term renters. Or vice versa - the short-term renters are uncomfortable vacationing next to long-term renters in their day-to-day. Does anyone have any experience with this and if so, how did it turn out?

Thanks

Kyle

Thanks

Kyle

Fiza Ah · Answer

Can you give your current tenant (LT) a discount for putting up with new people? Maybe $100/month

Kyle Joseph · Answer

Thank you @Joe Splitrock and @Scott M. I think my gut is probably right on this one

Scott M. · Answer

We had one in Florida a few years back and for us it didn't turn out well for the reasons you suggested.  The long term tenant asked to terminate the lease because sharing a house with people constantly on vacation was just too much.  We let him out and did short term leases in both units because that is what was best in the market at that time.  Glad we tried it. Doesn't mean you will get the same results though.  This was a party town in FL.

Joe Splitrock · Answer

I have thought of this too. One advantage is the long term rental is steady income and can be your eyes at the property. You seem to understand the potential down falls. Of course keep in mind that two STR tenants next to each other could have the same issues noise which could result in a bad review. At lease a long term tenant can't review you. Worst case they complain or decide to move out at the end of their lease. I would just talk to them about it and let them know what you are doing.