Pros & Cons of Renting Your Investment Property as a Short-Term Rental

Pros

• Higher Income Potential

• Flexibility & Personal Use

• Less Wear & Tear on Property

Cons

• Higher Management & Operating Costs

• Seasonal & Market Fluctuations

• Regulatory & Legal Challenges

Pros of Short-Term Rentals

1. Higher Income Potential
Short-term rentals can generate significantly more revenue compared to traditional long-term leases. By charging nightly or weekly rates, especially in high-demand locations, you can often outperform the steady but lower returns of a fixed tenancy.

Higher potential income is possible because of:

• Premium Rates - High quality properties achieve premium rates, especially during peak seasons.

• Dynamic pricing - if you use a short-term rental management company they will manage this for you.

• Diverse Guest Base - Shorter stays attract a variety of guests (holidaymakers, business travellers, digital nomads), keeping occupancy rates higher and reducing dependency on one long-term tenant.

2. Flexibility & Personal Use
One of the biggest appeals of STRs is flexibility. You can block off dates for personal use, whether for family holidays or as a second home. This dual-purpose benefit makes short-term rentals particularly attractive to investors who also want lifestyle perks.

3. Less Wear & Tear on Property
While frequent turnover can increase maintenance costs, short-term rentals avoid some of the deeper wear and tear that can occur from long-term tenancies, potentially preserving the condition of your property over time. Small maintenance issues can be picked up ahead of time through regular inspections and smart technologies can be utilised to ensure there are no illegal parties taking place on the property, in addition to strict vetting processes on all guests prior to booking acceptance.

Short-term rentals generally have less wear and tear because:

1. Shorter Stays – Guests usually stay only a few days or weeks, leaving less time for heavy use compared to long-term tenants.

2. Frequent Cleaning – Properties are professionally cleaned and maintained between bookings, helping to keep everything in top condition.

3. Minimal Alterations – Short-term renters rarely make personal changes (like hanging pictures), reducing the risk of cosmetic damage.

4. Regular Inspections – Owners or managers check the property between stays, addressing small issues before they escalate.

5. Rules & Deposits – Clear house rules and security deposits encourage guests to respect and care for the property.

6. Lighter Use of Amenities – Many guests spend time exploring or working, which means less strain on appliances, plumbing, and fixtures.

Cons of Short-Term Rentals

1. Higher Management & Operating Costs
Running an STR requires more hands-on involvement than a long-term lease. Between guest communication, cleaning, restocking, and property maintenance, costs can add up quickly. Many owners end up hiring property managers, which eats into profits.

2. Seasonal & Market Fluctuations
Income from STRs can be inconsistent if the property is not operated and marketed adequately. High-demand seasons may be lucrative, but off-peak periods can bring lower occupancy and revenue. Market shifts, such as travel restrictions or increased competition, can also impact profitability. However, with the implementation of a range of property management tools, this can present an opportunity to high-performing STRs.

3. Regulatory & Legal Challenges
Short-term rentals face increasing scrutiny from local governments. Zoning restrictions, licensing requirements, or outright bans can affect your ability to operate legally. It’s essential to stay updated on local laws and compliance to avoid fines or forced closures.

Tips for Success with Short-Term Rentals

• Invest in Professional Photography
  Guests shop with their eyes. High-quality, well-lit photos of your property are essential to stand out in crowded marketplaces.

• Use Dynamic Pricing Tools
  Software that adjusts nightly rates based on demand, seasonality, and local events can help you maximise income without losing competitiveness.

• Hire or Automate Property Management
  If you can’t commit to 24/7 availability for guest support, consider hiring a manager or using automated tools for messaging, check-in, and cleaning coordination.

• Focus on Guest Experience
  Thoughtful touches like fast Wi-Fi, quality linens, and local guides can boost reviews, leading to repeat bookings and higher occupancy.

• Stay Ahead of Regulations
  Research your area’s STR laws and ensure your property is licensed and compliant to avoid costly interruptions.

Conclusion

Renting your property as a short-term rental can be a profitable and flexible strategy, but it’s not without its challenges. Having access to reliable property management services, either through self-management or hiring professionals, is crucial for maintaining a successful short-term rental. If you would like to speak to someone about the suitability of your property, get in touch with us here.