Do you have a property and want to monetize it? What will be best for you? Local Accommodation or the traditional monthly rental?
If you have a house to rent in the rental market, know the major differences between the main modes available (Local Lodging vs. Monthly Lease vs. Traditional or long term rentals).
Traditional rentals (Long term rentals)
This mode is the most traditional lease, made for periods not less than one year.
It has its own legislation and is also the most common and least risky option.
Benefits
- Stability: Fixed price every month of the year.
- Lower Risk: It does not depend on occupancy fees, reservations and cancellations.
- Logistics: You don't have to waste time on tenancy-related tasks. Guests only change once a year if they change.
Disadvantages
- Usufruct: The owner cannot visit or use the property.
- Lack of control: Less control over preservation status.
- Missing Payments: You may have difficulty collecting rent on time and hours.
- Legal Requirement: Very strict laws, greater difficulty in terminating contracts.
Local accommodation
Local Accommodation is considered to be all properties available for leases of less than 30 days duration. These are usually short stays. Stays are on average 3 to 5 nights.
This option can be highly cost effective in most tourist areas and especially in the high seasons (summer, festive seasons, holidays, etc.).
Benefits
- Secured Payment: The stay only happens after receiving the reservation money.
- Decreased risk of deterioration: Visit the property between each reservation, allowing you to control possible damage and thus preserve the control and maintenance of the property.
- Availability and flexibility: As booking periods are short, the owner can visit and use the house whenever he needs it. It may even block availability for the desired periods.
- Ease of Disclosure: It has many platforms where you can advertise your property. Where there are thousands of people looking for a place to stay every day.
Disadvantages
- Some seasonality: The occupancy rate is higher in the high season months than in the rest of the year.
- Monthly Occupancy: It is difficult to reach 100% monthly occupancy, so there will be unoccupied days and therefore no income.
Monthly lease
Although it is a relatively recent way of renting apartments, it is highly profitable, as most homeowners still opt for Local Accommodation and Traditional Rentals.
Stays in this mode are at least 1 month and up to 1 year. Clients are, for example, professionals who move around because of work, people seeking medical treatment from abroad, tenants who have their house under construction and need to rent another for a few months, etc.
Benefits
- Licensing Not Required: You do not need to have a Local Accommodation license.
- High yields: The values are calculated per night, as in Local Accommodation, which makes them much higher than the values of traditional rentals.
- Availability: If you need to, you can use the house during the year. You can rent it only for a few months and use it for the remainder.
Disadvantages
- High season income: Depending on the time of year, the short term option (Local Accommodation) may be more cost effective.
- Occupation: You may not be able to occupy the property all year round, as demand is very specific and not as high as in Local or traditional accommodation.
These are the three main ways to rent a home. Find out well and find the solution that is most advantageous and simple for you.
This article has as source of information the Feels Like Home.
