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Monthly rentals VS Long-term Rental: Which is better for you?

月曜日 , 09 7月 2018 ARTICLES

The LINE Sathorn

After being handed the keys to their property, the next step for an investor is to start capitalising on it. Although long-term rentals have been traditionally looked upon as a favourable option, the introduction of Airbnb and other industry-disrupting business models have allowed homeowners to choose between the two.

 

For the purpose of this article, monthly rentals refer to the letting of property for a rental period that is typically under 6 months. Rental guests have varying profiles, ranging from tourists looking to get the ‘local’ experience’ to local homeowners needing a temporary accommodation during home renovations.

 

Long-term rentals, on the other hand, usually involve rental contracts from 6 to 12 months. These properties are usually near amenities such as shopping malls and schools - important features that residential home owners find attractive.

 

In this article, we list down four major factors that homeowners should consider when choosing a suitable option for their property.

 

Potential Rental Yield

One of the first and most important factors to consider when renting a property out is the rental yield, i.e. how much rental income can be earned. Monthly rentals are known to bring in almost 30% higher rates, sometimes more than twice the amount of rental income compared to long-term rentals, especially during seasonal periods.

 

Stability of Income

Though monthly rentals can bring in higher income, it might not always be consistent. Long-term rentals ensure a steady stream of revenue, so homeowners are able to estimate how much they can earn annually and adjust their plans accordingly. Monthly rentals on the other hand, are lucrative only if high occupancy rates are guaranteed. There could be periods of time when the property is vacant, either due to last-minute cancellations or low demand, which does not maximise the use of the property.

 

Maintenance & Management

Managing a monthly rental tenant requires much more effort and time than managing a long-term property. Furnishing, cleaning, maintenance, replenishing essential supplies are some of the property management tasks that are left to the homeowners themselves when they opt to rent out their property on a monthly basis. This can get especially challenging for those who live in a different country from their investment property, though there are apps like Hostmaker, which can effectively help to manage rental guests more easily. Those who choose the long-term rental model can live hassle-free as basic maintenance can be left to the tenant, with homeowners rarely needing to step in. Property management companies like Plus Property also offer end-to-end services like facilities, tenant and sales management.

 

Regulations

Regulations wise, monthly rentals are still permissible by the Hotel and the Condominium Acts, pointing to these rentals not being a violation of the law.


The choice between monthly and long-term rental needs to be made after carefully considering both the needs and the current capacity of the homeowner. Members of the Sansiri Family are encouraged to approach our Plus Property agents to seek assistance and advice on their Sansiri properties.

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