The spread of coronavirus has impacted business in many different sectors across the world. The tourism area has been hit badly by the pandemic. Lockdowns imposed by governments, restrictions on international flights, and the fear of the virus have significantly reduced the traveler flow in all nations. Even the most sought-after tourist destinations have suffered terribly. A fall in the figure of tourists meant the decline of business for the owners of short-term holiday rentals in Airbnb. However, the introduction of mid and long-term rentals is now the latest trend on Airbnb. Property owners are renting out homes for an extended duration to generate income.
People stranded in cities away from their home, employees seeking a location change for their work-from-home, and national tourists prefer hiring for the long-term. It has been found that long-term rentals are a dependable source of constant income and also improves the percentage of occupancy of the Airbnb property. In this article, we explore all aspects of long-term rentals that can be valuable to proprietors of Airbnb property.
How long-term differs from short-term rentals
In case of prior reservations with Airbnb, you probably know how the short-term rentals work. These are usually booked for few days or a couple of weeks by people on short business trips or a vacation. The bookings are always less than 28 days.
In long-term rentals, customers can make a reservation for more than a month. The renting happens on monthly basis. Long-term rentals are preferred by students who are pursuing some course in a city far away from home, people on lengthy company tours, or professionals from a medical background.
Both classes of rentals differ in many areas and have different purposes for reservations. The rules that apply to short-term rentals will not be the same for long-term rentals. Also, the payment system is different. In the case of long-term rentals, the guest and host are expected to sign a formal contract including all information about the rental. Such things are not required when booking an Airbnb short-term rental.
To recognize the distinction between these two types of rentals, a few benefits of both have been highlighted:
Benefits of Airbnb Long-term rentals
Income is consistent
Customers who look for long-term rentals usually make reservations for few months. The owner is assured of the property being occupied for a long time. This means the income will be consistent as long as the customers are occupying the property. Factors such as season or fluctuating rates will not affect the income when it is a long-term rental.
Maintenance is cheaper
Talking about short-term rentals, it is the responsibility of the host to clean and maintain the property after the departure of every customer. When the property is hired for a prolonged period, the occupants are responsible for some basic maintenance. Tasks such as cleaning, stocking toilet paper, purchasing essentials are taken care of by the customers. The host can have fewer things to manage when the property is rented for long.
Less marketing needed
Short-term rentals demand a good promotion strategy. There are a lot of options on Airbnb. So, to stand out among all other short-term rentals, constant marketing is important. However, when you are handling a long-term rental the marketing needs are much less because you will have guests for months.
No fancy amenities required
Short-term rentals face high competition in the market. Hosts, therefore, have to provide some extra amenities to attract the guests to their property. People renting properties for the long-term will need only the essentials like dishwasher, washing machine, kitchenware, or vacuum cleaner. These are basic items that need to be purchased once. So, the cost of amenities is one time in long-term rentals.
Benefits of Short-term Rentals
Hosts who have properties in vacation hotspots make much higher earnings with short-term rentals when compared to long-term rentals. Based on the season and occupancy rate, rates can be set to maximize profit.
Pricing can be changed
Rental pricing can easily be adjusted to increase the profits in short-term rentals. Long-term rentals there is a fixed income that will come in as long as the occupant is there. You cannot alter the pricing for the long-term, even if there is no significant profit.
Short-term rentals can be used for personal needs whenever needed. Long-term rentals are booked for few months, during which you cannot use your property.
No paper signing
For long-term rentals, the visitor and owner need to sign agreement papers. Short-term rentals have no such terms. One can easily book your property for few days and enjoy their stay. Screening the tenants is also not necessary, thus saving you time.
Different Forms of Airbnb Long-term Rentals
Letting the property for the long-term is a pretty serious commitment for a host. Under the stressful situation of the pandemic, many short-term rental owners are contemplating a shift to long-term rental business to generate some income. Before you step into long-term rentals, it is important to understand the various forms of the business. You can pick the one that suits your needs best.
One common option of long-term rentals on Airbnb is providing a single room to one or two individuals for a few months. It is useful to students and workers who do not need a whole property for their stay.
If you are going away for a long trip to some other city or country, renting out your home for that period can be beneficial. You can list your home under the long-term rentals on Airbnb. People who look for a place to stay in for few months and prefer having a whole home to themselves find this option useful. As a host, you can easily earn a decent amount by renting the place.
Lastly, you can turn the short-term rental into a long-term rental by making a few changes in the Airbnb listing. This option is viable when the short-term rental business is not doing very well or during off-seasons.
Converting Your Property into Long-term Rental
There are specific modifications you need to make on the Airbnb listing to promote your long-term rental property. Here is a list of things you can do as a host to change your property into a long-term rental:
Update your rental listing for longer bookings
The first step is to let the guests know that your property is available for long-term rentals. Update the information about your property on the Airbnb site. Ensure your property is available for bookings for more than 28 days.
Weekly or monthly discounts
When the property is available on monthly or weekly discounts, it comes to the notice of the customers. Having discounts on a long-term basis is regarded as advantageous for renters.
When managing long-term rentals, it is important to get your guests to sign a rental agreement. This agreement is to ensure that no guests extend their stay at the property. The agreement is usually required if the booking is for more than a month. Keep in mind to mention the agreement in the Airbnb listing. Provide detailed information about the content of the agreement and how the guests can sign them. Rules and regulations at your property are also required to be mentioned in the rental agreement.
Policy for cancellations
Airbnb has a cancellation policy for long-term bookings for more than 28 days of reservation. If a guest makes a booking for more than a month, the rent of the first month is due. This amount needs to be paid to the host even if the booking is canceled. However, if the cancellation is done within 2 days of booking the full amount gets refunded to the guest. Anything later than that requires a payment for the first month. Cancellations made during the occupancy of the property calls for payment for a month after the day of cancellation. If it is less than a month, the guest has to pay for the remaining days.
Your guests might have issues or queries during their stay at the property. It is always a good idea to have someone in person to answer their questions. If you live on the same property you should put up your contact. If not, have a local person of contact for the guests.
In the case of short-term rentals, the payment system is simple and easy. The visitor is expected to give the entire rent upfront before the stay. For long-term rentals, the payments are slightly varied. It might not be reasonable for customers to give the rent for few months together.
In Airbnb long-term rents, the customers are required to make a payment for the initial 30 days after the reservation has been made. The host can expect to receive the payment within a day of the renters checking into the rental. Airbnb will then charge the guest every month from the credit card for the period of their stay. Airbnb provides a detailed guide on the long-term rental reservation payment system which can be referred to for a better understanding of the policy.
Screening the renters
You must know about the people occupying the property. To avoid landing into any troubles later, verify the guest’s details before the reservation. The email address, phone number, and other personal details provided by the guest should be thoroughly verified for security reasons. Going through the guest review is also a safety step.
Hand out a welcome book
It is always a good idea to provide instructions to the renters in a written format. It shows your professionalism and they do not have to contact someone in case of any queries. The manual should specify things such as where to throw garbage, laundry timings, availability of house help, and location of nearby schools, gyms, parks, etc.
What is an Airbnb welcome book and how to write one read here.
Things to keep in mind before beginning a long-rental business
Before you start letting the property for long-term use, there are several things a host should know.
Location of home
Properties situated in places with plenty of tourists coming in do better business as short-term rentals. If you want to rent out the property for the long-term, choose a time when tourists are fewer. You can also make the property a long-term rental for some part of the year. The idea is to have a constant income with as many profits as possible. So, choose wisely.
Know local rental rules
Every area has some specific rules related to long-term rentals. Airbnb has local rules usually in compliance with the locally prevalent laws. The laws give certain rights to tenants. Hosts are not allowed to evict tenants without a legal procedure. So, understanding the local laws is important before you decide on the maximum period of long-term visit you will allow at the property.
Essentials and facilities
The provisions of a long-term rental are different from the short-term ones. Renters will be expecting basic facilities such as Wifi connection, washing, parking space, certain electrical appliances, uninterrupted water supply, and power. You can also customize the place to attract guests of a certain category, for example, students or IT professionals. The place can be either fully-furnished or semi-furnished. Mention all the information clearly on the listing to avoid any confusion after the customers arrive at the property. If your tenants feel you have put in the effort to make their stay comfortable, your listing will rank up and receive good reviews.
People doing reservations for a long visit might need to bring in their pets if any. As the owner, you have the liberty to determine whether or not you want to allow pets at the property. Mention a clear no pet policy on the listing if you do not want to allow pets.
Many hosts do not prefer the guests smoking inside the property for safety concerns. It is better to mention the same on the listing and also mention where they can be allowed to smoke.