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Short-Term & Vacation Rental Discussions

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Jason Munger
  • Rental Property Investor
  • Lansing, MI
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Long Term vs. Short Term - rule of thumb for what direction to go

Jason Munger
  • Rental Property Investor
  • Lansing, MI
Posted May 29 2019, 08:59

As investors we seem to have "formulas" or rules of thumb to help us through our decisions. 1% rule, 70% ARV, etc...

Anything that helps you quickly decide when a short term rental is better than a long term rental?

I normally think long term is lower risk (occupancy, crazy renters, etc) but less margin when compared to short term. I have a condo that would be great for short term rental on Airbnb or similar. It's a "golf resort" and right next to the clubhouse. However, it's in Panama City Beach and medium/long term rental properties are in short supply right now and getting an absolute premium. Without taking advantage of people, but charging a "fair market rate" I can do quite well with it. I've thought about the Airbnb route and in the future it is probably a good idea. But for now, I'm tempted to just leave it as a long term rental. Known vs unknown I guess. Plus for STR I would have to lay out the cash to furnish it.

I'm not asking if Airbnb in general is "worth it". I've already done that research. Just where is the break even point where you just go STR? I can sit down and do the hypothetical numbers. Just wondered if there was an "industry accepted" rule of thumb.

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