Renting out an investment property as a short-term rental

Rental investment is booming! Since this spring, mortgage rates have been steadily falling and reaching historic lows; this decline has led to a real boom in real estate purchases, and more than 94% of investors say they are satisfied with their investment! Furthermore, it is now possible to delegate your investment with Invisty. With the popularization of Airbnb, many investors have opted for short-term rentals. But why such enthusiasm for this type of rental?

Advantages

Profitability

First of all, short-term rentals are twice as profitable! Because your property is rented by the night rather than by the month, prices are often higher. This is a boon for many investors who can achieve a self-financing property: meaning that the rental income covers the expenses and the repayment of your loan. Be careful, however, as the profitability of your property depends on its location.

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Guaranteed Rent

Airbnb reservations are paid for upon booking. No more fear of non-paying tenants! Your property is paid for before it is even occupied.

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Taxation

Whether declared as an LMP or LMNP, you can deduct a portion of your seasonal investment expenses (renovations, loan interest, etc.) from your rental income. Be careful! Since the misuse of Airbnb by some users, the government has been paying close attention to the reporting of this rental income, so it is best not to play with fire when filing your tax return.  

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Enjoying your investment

Most rental investments are made for the purpose of renting or as a second home and benefit from a prime location. A location you don't personally enjoy, unless... By choosing short-term rentals, you can easily reserve a week or two in your property and finally enjoy your investment.

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Disadvantages

Time

Short-term rental is a very time-consuming business! Unlike long-term rentals where the same person occupies your property for several years, this type of rental involves much more frequent tenant turnover. This requires dedicating time to managing your investment: welcoming tenants, managing the rental schedule, cleaning the apartment, etc. Fortunately, concierge solutions like Welkeys can manage your investment for you!  

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Regulations

Not all cities and buildings allow short-term rentals! If you plan to invest in short-term rentals, be sure to check the condominium rules or local city regulations. City halls require you to file a registration request to obtain temporary authorization to offer short-term rentals. 

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Where to invest?

This is the long-awaited question and the most important factor in this type of investment: location. To know where to invest, you must take into account three major criteria:

-          Rental demand

-          The local real estate market

- Tourism appeal

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To achieve this, certain areas should be prioritized: urban centers, coastal regions, and ski resorts. These areas attract new tourists and vacationers, which means rental demand will be high! Be careful, however, not to choose a property that performs well during peak season but faces high vacancy rates during the off-season.

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This type of investment can sometimes lead to management fees if you choose a city far from where you live. However, solutions exist. That is what Invisty offers, a company specializing in remote investment. From prospecting to renting, including credit assistance and project management: Invisty handles your project from A to Z.

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Key takeaways:

- Short-term rentals are among the most profitable real estate investments.

- If you lack the time to manage your investment, solutions like Invisty are available to you.

- Prioritize tourist cities in areas favorable to tourism.