Done well, managing long term (6 month + lease terms) rentals can be something less than a full time job, depending on how many doors you’re renting. Still, the time commitment is a lot of hassle. If you’ve got a property manager doing a good job for you, then props to you – you’re probably paying around 10% for a single family residence and a little bit less for multi-family. That’s a reflection of the amount of time and energy required to manage the property.
In a short term rental (AirBnB/VRBO) you’re going to find that managing just one property is nearly a full time job. With short term rentals, it’s all about availability. If you pay someone to manage (host) your AirBnB rental, you’ll pay more like 20 or 25% to the property manager, and you’ll find that nobody you pay will work as hard to keep those five star ratings as you will. I’d recommend building an incentive plan for a paid host around ratings and occupancy and you’ll likely end up paying a lot for really good hosting.
The magic is in income. A long term rental in my market (travel destination) that rents for $1500/month on a 12 month lease could easily rent for $200/night as a short term rental. You can do the math, but you’ve only got to have 25% occupancy to match the income that you’d receive as a long term rental. In a destination market, it’s not hard to keep an attractive property well over 50% occupancy, so short term rentals are much, much more lucrative in my market <shameless plug>
With AirBnB, there’s actually less wear and tear on the property. While you have many, many more “turns”, short term rentals don’t get the floors and doors scuffed when a tenant moves in their washer and dryer, and a short term tenant will let you know when there’s a water leak, rather than just ignoring it for nine months and you discover $5k in damage after they move out. Short term renters don’t let their 12 year old paint their bedroom black. Short term rentals have some advantages that are counter-intuitive.
TLDR: Should you convert from LTR to STR? It’s up to you – it’s a lot more lucrative, but it’s a lot more work.
Shameless plug: Here’s a Short Term Rental property listed for sale:
To learn about Fairhope’s Short Term Rental Regulations, check out https://movetobaldwincounty.com/fairhope-short-term-rental-regulations/