Short term rentals can be very tempting when you have a San Jose rental property and you want to maximize what you earn on that investment. You can earn higher rent on a per-night rental than you can on a long-term lease. It also gives you the flexibility to use the property yourself when you want to be there.
However, there are a lot of unexpected costs when you rent your property out to short term tenants or vacation guests. Today, we’re looking at those expenses and helping you manage them.
Vacancy Rates Can Rise
While short term homes can often earn more on a nightly basis than long term rentals, there is a much higher vacancy risk. You won’t be able to keep your short term San Jose rental occupied every night. As we have seen during the recent pandemic, disruptions to the tourism industry and the shutdown of state and local economies can be devastating. A long term tenant will offer more stability and less vacancy risk.
To avoid losing money on vacancies, make sure you have a good marketing plan in place to attract people to your short term rental. Offer discounts on longer stays.
Wear and Tear and Maintenance Costs are Higher
There’s also a higher risk of wear and tear on short term rentals. You have different people coming through your doors, using your appliances, and living in the property. These guests know they’re only going to be in place for a short time, so they likely won’t be as careful with the property as they would if they were turning it into their home.
Make sure you have a network of great vendors and contractors to keep your costs down and protect the condition of your property. You’ll need excellent cleaners and landscapers, as well as people who can keep everything in the property well-maintained.
Providing a Furnished Home is Necessary
You don’t have to worry furnishing your San Jose rental property when you’re renting it out to long term tenants. But, with a short term rental, your guests are going to expect beds to sleep on and sofas in the living room. You’ll need to outfit the space with utensils, cooking equipment, and amenities like Wi-Fi. All of the utilities will be your responsibility.
This can get expensive. You can’t skimp on quality, either. When travelers choose a home over a hotel, they expect the same comforts and luxury. Cheap sheets and thin towels will not work. Buy in bulk when you can, especially if you have more than one property.
San Jose Property Management for Short Term Rentals
Professional property management is always a good idea, and with short term rentals it’s especially important. Unless you can handle the advertising, checking guests in and out, following up on their requests and concerns, cleaning and maintaining the property, and being on hand for any issues that come up during their stay, you’ll need a responsive and experienced management team. This will often cost more than long term property management services because it’s more labor-intensive.
We can help you keep costs down and find a way to make your short term San Jose rental property profitable. Contact us at Real Estate Connections for more ideas.