In the Kona rental market, owners have a decision about what to do with their investment properties. Is it better to rent out your property as a short term vacation rental or a long term residential home?
We work with both types of properties, and we’ve found that it really depends on your investment strategy, your short and long term goals, and your own plans for your Hawaiian home.
Here are some of the things you should be asking yourself as you make this decision.
Do You Want to Spend Time in the Home Yourself?
The first thing you’ll need to determine is whether you want to stay in the home yourself. A lot of people buy second homes in Kona so they can escape for a season, a week, or a holiday. If you expect that you’ll want to stay in the home at some point over the next year, a short term vacation rental is better for you. This will ensure you have the flexibility to come and go when you want without disturbing your current long term tenants.
If you aren’t going to need the home for a few years, a long term rental agreement will provide you with more stability and regular income.
Are You Worried about Vacancy Loss?
If you hate the idea of your rental property being vacant, you should consider renting it out to long term tenants. When you have a stable renter who has signed a one-year lease, you won’t have to worry about an empty property. You’ll receive routine rental income and you will have someone at the home to make sure there isn’t any deferred or unreported maintenance that’s causing your investment to deteriorate.
When vacancy isn’t an issue for you, short term rentals can be better. It means you won’t have someone in your home all the time, but you can let friends and family members use the home when they want, and you’ll have plenty of downtime to make repairs, upgrades, or other cosmetic improvements.
How Much Do You Want to Charge?
When you want to earn a steady, consistent income, a long term rental is better. You will charge less per month than you would with a short term rental, but you know you can count on a certain amount of income every year. With a short term rental, you can charge a lot more per night. But, you won’t always have income to count on.
Is Your Home Furnished?
If your property is completely furnished and you want to keep it that way, a short term rental is better for you than a long term rental. When you have tenants moving in for a year or more, they’re going to want to bring their own furniture and personal belongings. Your things will only be in their way.
If your property is unfurnished and you don’t want to invest in high quality linens and cookware and furniture, long term rentals are a must.
Whether you decide to rent out your property for the short term or the long term, a local property management company can help you lease, manage, and maintain the home. This is especially beneficial to short term rental owners because you’ll have a lot of turnover. With new people coming in and out of your home, you’ll be busy keeping it clean, responding to guest needs, and taking care of things like linens.
We can help you. Please contact our talented and experienced team at Hawaiian Dream Properties.