Our topic for today will be Airbnb long term rentals, and everything that comes with it. Why?
Airbnb has made the concept of short-term and long-term rentals more accessible for both the guests and the owners of the said property. The platform is usually associated with short-term renting but it does a good job of helping people find long-term rentals if they’re looking to prolong their stay.
So, we’re here to discuss Airbnb long term rentals, the pros and cons of running one, and what steps you need to take to set up a long-term rental—along with the best places to do it.
Airbnb Long Term Rentals Defined
Airbnb long term rentals are a relatively new trend, and they’re growing more popular by the day. With the pandemic still affecting our daily lives and remote work being the new normal, the market for short-term rentals has experienced serious changes, as traveling has been brought down to a minimum.
Short-term rentals simply weren’t sought after anymore; people weren’t looking to stay the night somewhere. Airbnb needed to switch things up a bit to stay in the market, introducing long-term rentals as a direct response.
New tools were introduced, as well, in an effort to keep the platform relevant during these trying times.
As you likely know, short-term rentals are used by guests for a few days (or up to a few weeks) as they travel or relocate to a different city.
On the other hand, long-term rentals are used for extended periods—one month or longer. The guest still gets to use the Airbnb platform the same way as they would have to book a particular property short-term.
The issue associated with any long-term rental is that, despite getting the same treatment on the platform, the “renting” part is considered more of a sublet or a lease on a certain property. Because of that, the long term rentals Airbnb may be subjected to tenancy laws—something we don’t generally come across with short-term rentals.
It’s important to keep in mind that rules aren’t the same for long-term rentals—but we’ll cover that in the following section.
Pros & Cons of Running Airbnb Long Term Rentals
Like every other investment strategy out there, long-term Airbnb rentals come with their own set of pros and cons. So, if you’re thinking of switching your properties to long-term renting, you will need to consider the cons—as well as the pros—before you decide which is the better option for you.
The capital advantage of long-term rentals is that you get to ensure a steady income throughout the year, rather than earning plenty during the peak of the season and almost zero for the rest of the year. Many people opt to explore a particular location during the low season, as they can stay longer for cheaper.
What’s more, the cancellation policy for long-term rentals with Airbnb is typically more favorable compared to short-term rentals. It applies to guests who book a stay for at least 28 nights—and longer. How is it more favorable? The guests must give a 30-day notice to cancel their booking. To top it off, the guests are still required to pay a month’s rent—which certainly works to the advantage of investment property owners.
On a similar note, if the guest wishes to cancel the reservation upon check-in, they’ll be required to pay 30 days of rent or the rest of their reserved stay.
Another great thing about long-term rental is the “lack” of responsibilities.
Every Airbnb host knows that plenty of work goes into short-term rentals—cleaning, organizing, and preparing the property before and after each guest comes and goes.
With short-term rentals, you are likely required to organize everything after every guest checkout, which can range from every day to once a week. But that goes away once you rent it out long-term. You see, with guests staying for months on end, you can enjoy your steady revenue without the need to prepare and advertise your property and find guests for the next month. You are practically all set.
But the steady income comes with a downside you will need to keep in mind. Since the fee is fixed for the monthly rate, you, as a property owner, won’t be able to correct and adjust your pricing to maximize profits and return on investment, as well as the cap rate during the peak of the season.
That might be a potential problem since many property owners rely on the cash flow of the high season rather than income throughout the year. Losing the ability to raise your prices during the high season could affect your income.
So, consider everything before you opt for long-term rentals.
Another disadvantage is the “lack of freedom” to manage the rental properties. You will need to adjust your plans according to your guests, rather than the other way around—which might give you less flexibility.
There are advantages and disadvantages in hosting Airbnb long term rentals.
Is There an Airbnb for Long Term Rentals & How to Set It Up?
As discussed so far in this article, hosts can now make their Airbnb properties available for long term rental. But there are several steps you’ll need to take to make your property one of the Airbnb long term rentals. The goal is, of course, to attract guests into staying long-term at your property and enabling them to book your rental property for longer than 28 days at a time.
1. Enabling Long-Term Booking
The first step you’ll need to take regarding your property is enabling potential guests to book your rental for an extended period. With Airbnb long term rentals, the guests will book for at least one month—but they can book for a few months, as well.
So, you will need to enable a long-term booking option and check if your property is labeled “available.” Once set, your potential guests will be able to see that they have the option for an extended stay at your rental property.
To do that, you will have to check your property listings—and see if the particular property you want to turn into a long-term rental is there. Then, enter the “Availability” settings and change them, going to the “Trip Details” afterward to edit them.
Remove the maximum stay in the “Trip Details” and turn on the “More Extended Stays” for your guests. Then, click Save, and that’s it—you have successfully completed the first step.
2. Setting Up Discounts
The guests need to be attracted to your rental property—meaning, you’ll have to do something to catch their eye. More often than not, guests will look for a property that offers discounts, be it weekly or monthly rates for Airbnb long term rentals.
Setting up a discount is pretty straightforward: You will need to select the property, click the “Pricing,” and select the “Length of stay discounts.” Then, edit the discounts and put in the deals for the weekly or monthly stays—while keeping in mind the Airbnb comps, of course.
Do note that weekly deals are applicable for bookings going from 7 to 27 days. As for stays over 27 days, the monthly discount applies.
3. Ensuring Quality Service
Providing quality service to your guests is the key to success with your Airbnb business, whether you are hosting Airbnb long term rentals or short-term stays. Hosts must make a good impression and stand out in the Airbnb world with their rentals. On that note, there are several things you, as a host, must do.
Remember, if the guests are a perfect fit for what you had in mind, you can always offer them a discount for their stay. That will leave a good impression on them—and it certainly will help your reputation as an Airbnb host.
One of the main things when it comes to quality service in an Airbnb rental is giving your guests everything they are looking for. Make sure to mention everything you offer in your rentals, such as a well-equipped kitchen, the ability to do laundry, WiFi, a parking space, and the like.
As a host, you must also be able to respond quickly to everything that your potential guests may ask. On that note, you can include “house rules” in your listing to cover some FAQs and provide answers to your guests.
Remember to set the listing for long-term stays in the future, and you can also add the prep time for new bookings, advance notices, and the booking window, among other things.
10 Best Places for Investing in Airbnb Long Term Rentals
Finding the right spot for an Airbnb long-term rental is the key to success.
When it comes to long-term rentals, location is everything. That is precisely why you will need to select an Airbnb for sale carefully—and even consider using our Airbnb calculator for help.
You’ll find the 10 best places to invest in an Airbnb long-term rental below. So, let’s get to it.
Here are the hottest locations for an Airbnb income potential based on cash on cash return, according to Mashvisor’s latest Airbnb data.
1. Fort Wayne, IN
- Number of Listings for Sale: 370
- Median Property Price: $303,612
- Number of Airbnb Listings: 208
- Monthly Airbnb Rental Income: $2,610
- Airbnb Cash on Cash Return: 5.79%
- Airbnb Daily Rate: $98
- Airbnb Occupancy Rate: 73%
- Walk Score: 32
2. Virginia Beach, VA
- Number of Listings for Sale: 256
- Median Property Price: $567,073
- Number of Airbnb Listings: 725
- Monthly Airbnb Rental Income: $4,500
- Airbnb Cash on Cash Return: 5.70%
- Airbnb Daily Rate: $252
- Airbnb Occupancy Rate: 58%
- Walk Score: 20
3. Birmingham, AL
- Number of Listings for Sale: 184
- Median Property Price: $412,582
- Number of Airbnb Listings: 451
- Monthly Airbnb Rental Income: $2,942
- Airbnb Cash on Cash Return: 5.59%
- Airbnb Daily Rate: $132
- Airbnb Occupancy Rate: 67%
- Walk Score: 32
4. Louisville, KY
- Number of Listings for Sale: 590
- Median Property Price: $322,877
- Number of Airbnb Listings: 1,110
- Monthly Airbnb Rental Income: $2,555
- Airbnb Cash on Cash Return: 5.40%
- Airbnb Daily Rate: $176
- Airbnb Occupancy Rate: 61%
- Walk Score: 49
5. Baton Rouge, LA
- Number of Listings for Sale: 169
- Median Property Price: $525,283
- Number of Airbnb Listings: 339
- Monthly Airbnb Rental Income: $3,220
- Airbnb Cash on Cash Return: 5.25%
- Airbnb Daily Rate: $174
- Airbnb Occupancy Rate: 59%
- Walk Score: 26
6. Honolulu, HI
- Number of Listings for Sale: 590
- Median Property Price: $772,876
- Number of Airbnb Listings: 1,394
- Monthly Airbnb Rental Income: $4,414
- Airbnb Cash on Cash Return: 5.24%
- Airbnb Daily Rate: $149
- Airbnb Occupancy Rate: 92%
- Walk Score: 47
7. Tulsa, OK
- Number of Listings for Sale: 390
- Median Property Price: $356,076
- Number of Airbnb Listings: 616
- Monthly Airbnb Rental Income: $2,643
- Airbnb Cash on Cash Return: 5.10%
- Airbnb Daily Rate: $120
- Airbnb Occupancy Rate: 64%
- Walk Score: 36
8. Colorado Springs, CO
- Number of Listings for Sale: 248
- Median Property Price: $488,010
- Number of Airbnb Listings: 621
- Monthly Airbnb Rental Income: $3,225
- Airbnb Cash on Cash Return: 4.71%
- Airbnb Daily Rate: $161
- Airbnb Occupancy Rate: 67%
- Walk Score: 28
9. Wichita, KS
- Number of Listings for Sale: 111
- Median Property Price: $313,264
- Number of Airbnb Listings: 266
- Monthly Airbnb Rental Income: $1,872
- Airbnb Cash on Cash Return: 4.32%
- Airbnb Daily Rate: $108
- Airbnb Occupancy Rate: 58%
- Walk Score: 38
10. Palm Springs, CA
- Number of Listings for Sale: 150
- Median Property Price: $945,836
- Number of Airbnb Listings: 621
- Monthly Airbnb Rental Income: $5,092
- Airbnb Cash on Cash Return: 3.02%
- Airbnb Daily Rate: $358
- Airbnb Occupancy Rate: 65%
- Walk Score: 59
So, these are the best places to invest in an Airbnb property. We have carefully picked out these locations because they are urban areas with plenty of tourists and visitors, and that could help you maximize the profits on your investment.
Remember to do an Airbnb analysis to check if the property you like is, indeed, the right option. Careful planning and location selection can only result in your rental property giving back more in return.
Bottom Line
Airbnb long term rentals are certainly the answer to the current situation in the traveling industry. With fewer travels and various restrictions, long term Airbnb rentals are the go-to solution for property owners in this business.
There are plenty of advantages to renting long-term rather than short-term—such as the lack of weekly responsibilities and the potential to earn more money. On the other hand, it could come with a downside, especially when it comes to earnings, as you can miss out on the high season revenue due to the fixed price.
Mashvisor’s tools can help you find the best properties to invest in—in the best locations and the most sought-after cities in the US—taking into account the cap rate and other metrics you can select for yourself.
Click here to start using Mashvisor.