Disadvantages of Short-Term Rental Management

Disadvantages of Short-Term Rental Management

Revenge travel has been the world's way to get "vengeance" on the pandemic by traveling en masse. And boy is the revenge sweet. In 2023, about a third of US households decided to vacation during the summer - a number we haven't seen since 2015.

This has led to many property owners scrambling to create a repertoire of short-term rental properties. Done right, investments in the short-term rental property market can be incredibly lucrative. But like all things in life, vacation rental management companies are quick to warn about the downsides.

Today, let's take a quick look at the disadvantages you should know concerning a vacation property in Daly City, CA.

Vacation Rentals Have Inconsistent Tenancy

It can be difficult to find a good tenant for a long-term rental, especially one that won't be a pain during their tenancy. Still, that tenant is guaranteed money every month for the term of the lease. Once you sign the lease, you can sit back, relax, and collect those payments with ease.

That passive income is less consistent with a short-term rental. There will be boom seasons where you get tons of tenants, and shoulder seasons where you may have to drop prices. In some cases, you might be booked back-to-back, but it's rare for that to continue for long stretches.

They Have More Maintenance Costs

Long-term tenants have good incentives to keep your property in great repair. If they break things, they have to pay to fix them. Since it's their home, they treat it with respect.

Short-term rentals, however, have tourists who only need a bed to sleep in at night. They don't care about causing damage and treat the place like a gas station bathroom. As a result, property maintenance may be more frequent and more expensive even when you impose fines.

Tenants May Be Less Reliable

Again, long-term tenants tend to be better behaved because of contractual obligations. Being a bad tenant can bite them in the rear for future rental agreements. So generally speaking, they are less likely to be the sort that breaks rules and causes a ruckus.

Tourists, because of their short tenancy, are more likely to be unreliable and poorly behaved. Since you have more people coming through, there's a higher chance that some of those people will be bad eggs. That's going to result in headaches from the problems they cause and higher insurance coverage premiums.

It also means you'll have to spend more time vetting individual tenants. This adds up when your busy schedule might require checking out hundreds of tenants per year.

Find Vacation Rental Management Companies

Vacation rental management companies love short-term rentals, but they aren't afraid to admit that there are some downsides. There's less consistency in occupancy rates, and the tenants that come through are not always of the highest caliber of people. This can lead to higher costs, both in maintenance and insurance premiums.

PMI SF Peninsula in Daly City, CA is the #1 property management franchise in your city. We provide our clients with unparalleled experience and more options for your properties than our competitors. Give us a call if you want to maximize your property's earning potential.