Short term rentals are popular in this part of Michigan, and many people with second homes or investment properties often wonder if it makes sense to use their homes for short term renters. One of the things you need to think about is the amount of turnover you’ll have, and how that affects your management and your costs.
Turnover and Management
You will need to be prepared to run your property like a business. You’ll have to manage it more like a hotel than a rental property because people will be moving in and people will be moving out every week on a regular basis. It’s important to have vendors lined up and willing to clean and get the place ready for new tenants in just a short amount of time. There’s a lot more that can go wrong, so you have to be organized.
Payments
When you rent out a property short term, you’ll need to be able to accept payments electronically. People book online these days, and they will want to pay by credit or debit. Make sure you’re set up to accept these payment types.
Vacancy Costs
A cost that most people don’t think about is vacancy. You can find tenants without a problem during the main season – which is the summer. So for 12 to 14 weeks, you’ll be fine, but finding renters during the off season can be a struggle. You’ll be profitable throughout the summer, but when you don’t have anyone in your property for the other nine months, that vacancy can eat into your profits. This is something to consider if you’re deciding to do a short term rental.
Management Fees
You may decide to hire a professional management company, especially if it becomes hard to keep up with the constant tenant turnover. The management fees will be higher than they are with long term rental management. You can expect to pay between 20 and 30 percent of the rent you earn, depending on the property and the company you choose.
We manage short term rentals, so we can answer any questions that you may have. Please feel free to contact us at Real Property Management Southwest Michigan.
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