Are Short Term Residential Leases More Lucrative in Sought After Locations? (lease, tenants)

[PhinneyWalker]

I am investigating the notion that offering residential rental property on a short term lease, e.g. 1-3 month terms, to visiting professionals in sought after areas more lucrative than offering traditional one year leases with regular tenants who would likely renew a one year lease at least 1-2 times after the initial lease expires?

For example, if I had a small but nice 2/1 house in an area close to the medical centre and downtown and the cultural district, etc., and I could lease it for say $1300 a month on a one year lease, could I instead offer it on a 1-3 month short term lease for say $1600 instead and thus make more money on it? Is it likely people would be willing to pay a premium on a short term lease whilst looking for something with a longer term lease or a mortgage? I am thinking of visiting professionals, for example nurses or maybe someone new to the area who wants a short term lease whilst they search for a property to buy or a larger property to lease. Is there enough demand for this sort of lease in an area with a pretty healthy economy? Are there likely enough people who would be happy to pay a premium for not locking into a one year lease to make short term leases worth pursuing?

[prospectheightsresident]

Could very well be the case as leases shorter than 12 months are generally more expensive precisely because of the additional work/effort/lack of certainty that a LL would have in finding a new tenant. While this uncertainty may not be there in highly desirable locations, I've still seen the general trend hold.

That said, such a setup can also be a lot more work for you as a LL to prep the unit in between shorter leases. Sure, you can get a property manager--and still may come out better than the alternative this way--so this should be an additional cost to consider.

I'd also make sure that you do your research as to whether short term rentals are allowed wherever you're looking to possibly set up shop. And even if there is no law against them, short term rentals may be banned by your association, etc.

[oregonwoodsmoke]

I know people who do it with some success.


You will have to do several turn-overs every year and those short term rentals are all fully furnished, which means more work and more expense.


You can specialize in short term workers like traveling nurses instead of vacationers and you will get less damage.

[MrRational]

Originally Posted by PhinneyWalker

I am investigating the notion that offering residential rental property on a short term lease,
e.g. 1-3 month terms, to visiting professionals in sought after areas more lucrative than...

As in convenient to the hospital or university etc where their short term assignment will be. Yes.
Nicer "curb appeal" is nice too but not needed to make a situation work if convenient to <whatever>.
If you allow pets then convenient to a good dog park might be most important to them.

I am thinking of visiting professionals, for example nurses or maybe someone new to the area
who wants a short term lease whilst they search for a property to buy or a larger property to lease.

Yes. The traveling nurses have their own networks.

[foulball]

Originally Posted by PhinneyWalker

I am investigating the notion that offering residential rental property on a short term lease, e.g. 1-3 month terms, to visiting professionals in sought after areas more lucrative than offering traditional one year leases with regular tenants who would likely renew a one year lease at least 1-2 times after the initial lease expires?

For example, if I had a small but nice 2/1 house in an area close to the medical centre and downtown and the cultural district, etc., and I could lease it for say $1300 a month on a one year lease, could I instead offer it on a 1-3 month short term lease for say $1600 instead and thus make more money on it? Is it likely people would be willing to pay a premium on a short term lease whilst looking for something with a longer term lease or a mortgage? I am thinking of visiting professionals, for example nurses or maybe someone new to the area who wants a short term lease whilst they search for a property to buy or a larger property to lease. Is there enough demand for this sort of lease in an area with a pretty healthy economy? Are there likely enough people who would be happy to pay a premium for not locking into a one year lease to make short term leases worth pursuing?

For that kind of premium, I think I would rather do Airbnb. I wouldn't have to pay electricity, water, internet, etc. I also wouldn't be signing a lease, wouldn't be paying large deposits, and I can pay with a credit card to earn points or cash back.