Long-Term Vs. Short-Term Rentals: Which One Is More Lucrative?

Long-Term Vs. Short-Term Rentals: Which One Is More Lucrative?

One of the best investments you can make is property. You can rent them out and earn passive income while you’re focused on your day job. Many people have earned a sizeable profit by renting their properties for the short-term on platforms like Airbnb, especially those in areas that experience a high volume of tourists.

Still, short-term rentals aren’t all that your property has to offer: you can also choose to rent it out for the long-term, assuring you a more stable income. Long-term and short-term rentals have their advantages and disadvantages, so it’s essential to consider which one fits your needs more. Here are the pros and cons of both:

The Benefits of Short-Term Rentals

Short-term rentals can offer 60 per cent higher profits than long-term rentals since the price can skyrocket during peak seasons. Browsing the nightly rates on Airbnb will give you an idea of how much properties can earn in as few as two or three nights, which is often considerably more than how much you can make by renting your property in the long term. Additionally, if you love meeting new people, you’ll have a revolving door of travellers that you can befriend and get to know.

Another benefit of short-term rentals is that they’re much more flexible, giving you complete control over when you want to rent the space and how long you’re willing to have it occupied. If your circumstances change, you can remove the listing and occupy the property for yourself, such as taking your family on holiday. It’s impossible to do this with long-term rentals, as the tenant will use the properties as their primary residence.

The Downsides of Short-Term Rentals

Like everything else, short-term rentals also come with their downsides. For instance, you’ll always have to be ready to assist your guests and respond to their messages around the clock. If you don’t reply to their messages promptly, they’ll be more likely to move on to another listing while tanking your visibility and ratings on the platform. However, you can also entrust your property to a short term rental management company to take care of this for you.

Additionally, you’ll need to clean the property regularly as new guests filter in and out multiple times every week. You’ll have to invest in a cleaning service to dust and vacuum your place while washing and replacing towels and bed linen. If you hire a professional third party to do this, be sure to incorporate a cleaning fee in your listing to cover the cost.

Since many strangers will be in and out of your home, you’ll have a more challenging time vetting the trustworthiness of your guests. Airbnb is great for keeping a high level of trust between hosts and guests. However, you are still ultimately welcoming a total stranger into your property. You’ll also have to invest in marketing your short-term rental due to the rapid turnover of guests to ensure a steady stream of income.

The Benefits of Long-Term Rentals

Long-term rentals offer you peace of mind since you don’t have to worry about continuously finding new tenants or marketing your property. You can rest easy knowing that you have a tenant for several months or even years, removing the need to be on the lookout for guests to supply you with consistent income. Even though you may earn a bit less than short-term rentals, you have the security and guarantee of having someone in your property at all times, giving you secured income for the duration of the agreement.

Another benefit of long-term rentals is that you have a tenant who has more incentive to take care of your property since they’ll stay in it for at least six months. They’ll want to get their security deposit back as much as possible, which means they will invest in maintaining the property and keeping it in good condition.

The Downsides of Long-Term Rentals

Being locked into a year-long contract with a tenant isn’t always sunshine and rainbows when you have to deal with volatile circumstances. You can’t change your mind about the terms of the occupancy or use the property to host a trip for you and your friends, and this lack of flexibility often doesn’t correspond to many property owners’ lifestyles. You’ll also have to give up some control since you cannot enter the property any time you want to respect the tenant’s privacy.


The benefits and downsides of short and long-term rentals vastly differ, so it’s ultimately up to you to decide which one is best for your situation. Regardless, renting your property will bring another income stream to your household, and you can work with a property management firm to figure out which arrangement is the most ideal for you.

Own Better offers more than simple property management; we can handle all your property needs and ensure you get the best possible returns for your property portfolio. We can seamlessly transition you from the short term to the long term market to take advantage of the seasonality of visitors and deliver the best return for your investment. Whether you need short term rental management or require traditional property management services in and around Sydney, we can do it all. Contact us today to learn more about what we can do for you.

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