Top 5 Reasons Why Short-Term Vacation Rentals Are Great For Your Real Estate Portfolio

By Robert Pharoah, Owner of Property Management, Inc. Brevard

If you’re looking for ways to diversify your real estate portfolio, short-term vacation rentals may be just what you need. Here are the top five reasons why short-term vacation rentals can be a great addition to your real estate portfolio. 

#1. Higher Rental Income

Short-term vacation rentals often generate higher rental income compared to long-term rentals. This is because vacation rental properties can be rented out on a daily or weekly basis, allowing you to charge a higher rate per night. Additionally, in popular vacation destinations, there is often a higher demand for short-term rentals, which can drive up the rental rates even further. 

For example, a typical long-term rental property in a suburban area may rent for $1,500 per month, while a vacation rental property in a popular beach destination may rent for $200 per night or more during the peak season. This means that you could potentially earn more income from just one week of renting out your vacation property compared to a month of renting out a long-term rental property. 

#2. Flexibility

Another benefit of short-term vacation rentals is the flexibility they offer. With a long-term rental, you typically must sign a lease agreement with a tenant for a set period of time, which can limit your options for using the property yourself or making changes to the property. With a short-term vacation rental, you can rent out the property as much or as little as you want, and you can also use the property for your own vacations or personal use. 

This flexibility also extends to the rental rates. With a short-term rental, you can adjust the rental rates based on the demand, time of year, and other factors. This allows you to maximize your rental income and make the most out of your investment. 

#3. Lower Risk of Damage

One of the main concerns with renting out a property is the risk of damage to the property. With long-term rentals, tenants may cause damage to the property over time, and it can be difficult to track down who is responsible for the damage. With short-term vacation rentals, the risk of damage is lower because the guests are only staying for a short period of time. 

Additionally, most vacation rental platforms require guests to provide a security deposit, which can help cover any potential damage caused during their stay. This provides an extra layer of protection for your property and can give you peace of mind when renting out your property. 

#4. Tax Benefits

Another great advantage of short-term vacation rentals is the tax benefits. Rental properties are eligible for tax deductions, and short-term rentals can offer even more deductions compared to long-term rentals. Some of the tax deductions you may be able to take advantage of including: 

  • Mortgage interest 
  • Property taxes 
  • Insurance 
  • Utilities 
  • Repairs and maintenance 
  • Depreciation 

It’s important to consult with a tax professional to ensure you’re taking advantage of all the tax benefits available to you. 

#5. Appreciation

Finally, short-term vacation rentals can offer potential appreciation in value over time. If you invest in a property in a desirable vacation destination, the property value may increase over time as the area becomes more popular and in-demand. This can provide a good return on your investment when you eventually sell the property. 

Additionally, short-term rentals can allow you to generate income from the property while you wait for the property value to appreciate. This can make it a smart investment strategy for those who are looking for both short-term rental income and long-term appreciation. 

In conclusion, short-term vacation rentals can be a great addition to your real estate portfolio for a variety of reasons. From higher rental income to flexibility to tax benefits and potential appreciation, there are many advantages to investing in short-term vacation rentals. As with any real estate investment, it’s important to do your research and choose a property that meets your investment goals. 

About the Author

Property Management Inc. PMI – Brevard is a locally owned and operated property management company serving Brevard County, Florida. They specialize in Short Term Rentals managing single-family homes, townhouses, and condos, providing a full range of services. With a commitment to exceptional customer service and attention to detail, PMI Brevard strives to maintain its bran promise – Stellar Effective Communication, Honesty/Integrity, Accurate Accounting and an always Available management team.