What Is A Short Term Rental?

A short-term rental, also known as a vacation rental, refers to a furnished living space available for short periods, typically from a few days to six months. It is an alternative to traditional hotels and can include various types of accommodations such as apartments, vacation homes, or rooms in a shared space. 

Short-term rentals have become increasingly popular due to the rise of online platforms like Airbnb which offer benefits such as a more affordable and authentic alternative to traditional hotel stays, as well as more space and privacy. 

Understanding Short-Term Rentals

Short-term rentals refer to the practice of renting out a furnished property for a short duration, typically ranging from a few days to a few months. There are several factors you need to understand before considering diving into the short-term rental business including some of the defining characteristics of such properties as well as why they have so rapidly increased in popularity. 

What is a short-term rental? Key Characteristics

Short-term rentals are distinct from traditional hotels and long-term leases. They offer a flexible accommodation option for travelers and are often managed by individual property owners or property management companies.

Some of the key characteristics of a short-term rental include: 

• Rental periods that typically do not exceed 30 days.
• The landlord is responsible for paying bills such as utility rates. These can be included in the nightly rates or the day rates.
• The spaces come furnished for the guest's convenience. Short-term rentals should come with fully equipped kitchens that enable guests to cater their own meals and entertain if necessary.
• Most taxation authorities classify a property as a short-term rental if it is rented out for more than 15 days per year.

To run a successful short-term rental, owners and property managers need to understand the fundamental differences between vacation lets, long-term rentals and these types of properties. It’s these technicalities that determine how the property is managed, payment systems, and reservation methods. 

The Rise of Short-Term Rentals

They also offer temporary solutions for those who are not fully committed to staying in an area but require a place to stay. This trend has become particularly prominent since the increase in remote working opportunities. People are no longer obligated to stay in areas close in proximity to their offices, meaning they may be more inclined to trial a location before making a more permanent move. 

In this regard, the demand for short-term rentals has also seen a substantial increase. These platforms have facilitated direct connections between property owners and travelers, leading to a surge in the popularity of short-term rentals.

The concept and popularity of short-term rentals have also gained significant traction with the emergence of online platforms such as Airbnb, which have revolutionized the way people find and book accommodations. 

For holidaymakers, short-term rentals make the ideal place to stay given the freedom and flexibility of booking. They also offer a more personalized experience to guests, often allowing self-catering and closer proximity to local lifestyle establishments like restaurants and bars.  

Types of Short-Term Rentals

Short-term rentals come in various forms, including vacation homes, apartments, and unique stays such as treehouses and tiny homes which are popular for those looking for a more novel experience while on vacation. Each type offers a distinct experience for travelers and are adaptable to suit varying travel purposes.

Vacation Homes and Apartments

These properties offer a low-cost alternative for families on vacation, seasonal workers, or individuals seeking temporary housing between homes. They often come with fully furnished kitchens, living spaces, and bedrooms, providing guests with the comfort and convenience of a home-like experience. 

Vacation homes and apartments can vary widely in terms of size and facilities, but a proper rental will have amenities such as full kitchens, laundry equipment, cable or satellite television access, and internet access. As far as short-term rentals go, vacation homes are perfect for those traveling with larger groups. 

These are particularly popular among business travelers, as they offer a lot of the comforts of home, with the convenience of having a living space, work area, and dining section. 

Unique Stays

Travelers are seeking more personalized and authentic experiences, and unique stays offer just that. They provide travelers with the opportunity to stay in unconventional accommodations like treehouses, tiny homes, and themed rentals, which can be more memorable and exciting than traditional hotel stays. 

Unique stays also provide opportunities for travelers to engage with local cultures and communities, contributing to a sense of discovery and exploration. Millennials and Generation Z travelers, in particular, tend to favor unique accommodations and experiences, as they prioritize authenticity and personal connections.

Some of the unique stay types include: 

• Igloos
• Converted Buses
• Secluded Cabins in the Woods
• Boats
• Yurts

What’s becoming more evident is that unique stays can also be defined by the amenities and services offered, such as a private chef, a personal concierge, or a spa treatment. The unique stay experience is not only about the physical characteristics of the property or the amenities offered but also about the overall experience provided for the guests. These can therefore be very location-specific, so owners and property managers should take the time to learn about the unique attractions of the area for marketing purposes. 

Benefits of Short Term Rentals

For Property Owners

Short-term rentals can provide property owners with financial gains, flexibility in property usage, and the opportunity to generate income from their real estate assets. For a more concise breakdown of owner benefits, we’ve listed them below: 

• Greater Control: When owners rent out their property as a short-term rental, they have more control over who stays in their space. They can choose to screen potential guests and set specific rules and guidelines for how the property is used. This level of control can help to ensure that the property is well-maintained and protected.

• Less Wear and Tear: Short-term rentals experience less wear and tear than long-term rentals because tenants move in and out frequently. This means that the property is not used daily, which significantly decreases the chances of possible damage. Maintenance costs are also reduced since there is little work to be done to fix the property with short-term rentals.

• Flexibility: Short-term rentals offer a level of flexibility that traditional long-term rentals don't. Owners can choose to rent out their property for just a few nights, a week, or even a month at a time. This makes it easier to work around their own schedule and ensures that the property is always available when they need it.

As an owner, having a short-term rental can be a valuable income stream and therefore a great option for those who are looking into expanding their business or property portfolios. 

For Travelers

Travelers benefit from the variety of accommodations available through short-term rentals, the convenience of booking online, and the comfort of a home-like experience during their stay.

Some of the other benefits for travelers include:

• More space and privacy: Short-term rentals usually provide more space and privacy than traditional hotels, allowing guests to spread out and relax during their stay.
• Cost savings: Cooking meals instead of eating out saves money, and short-term rentals often feature lower nightly rates than hotels.
• More Variety: If travelers are looking for more unique experiences, they are more likely to choose short-term rentals as they offer a greater variety of rental options. Guests have the choice of small apartments, entire homes, or even secluded cabins to enjoy during their stay.

With these benefits in mind, it’s easy to see why the short-term rental market has gained so much popularity. 

Considerations Before Investing in Short Term Rentals

Although investing in a short-term rental may seem like an exciting prospect, there are some considerations you need to think about before taking the plunge.

Legal and Regulatory Compliance

Property owners must understand and comply with local laws, zoning regulations, and any specific requirements related to short-term rentals in their given area.  Professional property managers and agents will be able to help you suss these out before you make any property purchases. 

Management and Maintenance

Managing a short-term rental property can be challenging. Property management software can help operations, including booking management, guest communication, and maintenance scheduling. The onus of the properties maintenance rests on the owner of the property. For this reason, property management software can be a valuable tool for managing these properties. 

Long term vs short-term rentals

Long-term rentals typically involve leasing a property for an extended period, often six months or more, while short-term rentals are geared towards shorter stays, providing more flexibility for both property owners and guests. They are often used for residential purposes, such as renting an apartment or house for a year or more. 

Short-term rentals, on the other hand, are often used for vacation rentals, business trips, or temporary housing. Short-term rentals offer more flexibility for both property owners and guests, as they can be rented for a few days, a week, or a month at a time.

How to Get Started with Your Short Term Rental

If you’re keen to get going and start your short-term rental career, start with the following steps.  

Setting Up Your Property

To get started with a short-term rental, it's essential to prepare your property by furnishing it appropriately and creating an appealing listing with high-quality photos and detailed descriptions. This will help attract guests and ensure that they have a positive experience during their stay. 

Choosing the Right Platform

It's also important to choose the right platform for listing your short-term rental. There are several platforms available, such as Airbnb, and Vrbo, each with its own set of features and fees. It's important to choose a platform that aligns with your specific needs and target audience to maximize your rental income and ensure a successful short-term rental experience. 

For property management, Hospiria provides a dynamic tool that can help you to manage all the different facets of running a short-term rental, making your life a whole lot easier and ensuring guest satisfaction.