Every real estate owner knows that long-term and short-term rentals are a profitable way to generate extra income with their property. However, each of these rental types has it advantages and disadvantages. Let’s consider them carefully.
In general, a long-term rental is a classic and good example of a win-win game as both parties benefit from this deal. First of all, this type of lease is more convenient for the landlord. Drawing up a contract for more than one year provides the owner with financial stability and confidence. It also minimizes your costs in terms of maintenance.
Moreover, you can rent out a house or apartment without furniture, which in some cases is appreciated by some tenants. In long-term rent, the tenants are more responsible and take care of the property as if it was their own. If you have a house for rent in the Rivera Maya, we recommend you to rent it long-term for expats. Most likely a couple or a family, who is going to relocate here, may be interested in such a deal. Before making a decision, ‘let’s consider long-term rentals pros and cons.
Long-term Rentals Pros
- You will receive a monthly income.
- You can charge a security deposit. In case your tenants cause any damage to your property, you can use that deposit to cover the repairs. However, if your home is in good condition, that deposit is returned to your tenant upon the termination of the contract.
- Your tenant is in charge of the utilities and other maintenance costs.
- You get the possibility to rent the property for many years to reliable tenants.
- If you decide to sell the property, your tenant can be the first who can be interested in buying it.
Long-term Rentals Cons
- You can’t visit your property while your tenants are living in it.
- Finding the right tenant may be a hard job. In order to find a good tenant, make sure you gather references, interview her/him, and you can even set some rules.
- You can’t have total control of your property. Your tenant may redesign your home depending on his comfort and his needs. At the same time, you can avoid this situation by a contract clause prohibiting redesign.
As the costs on the Riviera Maya hotels are high enough, tourists tend to rent lodgment via Airbnb and other websites. In such circumstances, short-term rental sounds like an attractive option. Experts claim that in the vocational rent segment, there are periods of high demand. These are Christmas, Easter holidays, Spring break and summer. In these periods the prices may increase by two times. Thus, in a week, you can earn more than if you could get from the monthly rent. You can see that the short-term rental yields are higher. However, you should be aware of the risks associated with downtime.
Short-term rentals: Pros
- With short-term rentals you can rent your home whenever you want. When your property is not occupied, you or your manager can do some maintenance work and repairs. Moreover, you may “”freeze”” some dates at your Airbnb account and stay at your place for vacations in the Riviera Maya.
- Generally, short-term rentals fees are higher than long-term ones. This means you can make more money in less time.
- Renting out your property in the short-term is much easier.
Short-term rentals: Cons
- Short-term rentals require more maintenance. This is due to the constant guests’ rotation. You will have to clean, repair, and do some maintenance work every time a guest leaves.
- You or your property manager will have to take care of small details. Otherwise, you may have negative reviews that can affect your ‘property’s image.
- The constant money flow is not guaranteed. It will depend on the season, ‘guest’s reviews, and other factors that ‘can’t ensure you will have a precise monthly income.
Hiring a Property Management Company
When it comes to cleaning, repairing, checking-in the guests and being touch with them, would you do it all alone? Or you’d rather hire a property manager/company? You should know that this process is time-consuming and requires a lot of attention, especially in short-term rent. However, the whole income goes to your pocket. We recommend you to choose this scenario if you really have experience and interest in the organization of this process.
For those who ‘don’t have time or live far away, a property manager is a lifesaver. Hiring this service is really worth it. With the help of a professional, you just let your property work for you. ‘It’s up to you which scheme to choose, but you will not lose by any measure. Considering that a property on the Mexican Caribbean generates an incredible ROI, you will always be in a win-win situation.
If ‘you’re looking for a property in the Riviera Maya, please let us know! At Top Mexico Master Broker, we have a list of high-quality developments ideal for your investment.