What Is Short-Term Rental Property Management?

With the emergence and increasing popularity of such platforms as Airbnb, Booking.com, HomeAway and others, the short-term rental property market is growing rapidly globally as well as in the Baltic region and has become a viable alternative to traditional long-term rent for many property owners. In this article we’ll describe exactly how short-term rent differs from long-term leases, what are its main benefits and how can a short-term rental property management company help the property owners.

Recent growth of short-term rental industry

In Vilnius, the number of listings available for short-term rent on average has been growing by 7% every 3 months with extra properties being listed only for the summer period. The graph below indicates how the short-term rental listing supply in Vilnius has increased over the past three years (2016-2019) adding up to total growth in listings of 45% over this time period (shows listings on Airbnb/HomeAway, source: airdna.co).

It’s also interesting to look at what type of properties are being offered for short-term rent in Vilnius. Unsurprisingly, smaller apartments are the most commonly available ones, especially 1-bedroom apartments that account for more than a half of all the listings on Airbnb and HomeAway. The trend is likely to continue in the foreseeable future.

How does short-term rental market differ from traditional long-term rent?

The main difference is pretty obvious – the time period for which the given apartment is being rented out. While a typical long-term residential property lease is 1-year long, the average short-term reservation usually is a couple of days or even as short as one night.

The second large difference is the type of property that is being offered. It might not be that difficult to rent out a property which is located in a distant suburb of Vilnius and has last been renovated 10 years ago for a long-term tenant, however it might be a lot more challenging to do this for short-term renters. The main users of short-term rental platforms are tourists and business travelers and in most cases they are looking for a place in (or close) to the city center. It also should be in a reasonably good condition and have all the basic amenities that a traveler might need – fresh towels, iron, hairdryer etc.

What are the benefits of short-term rent?

In our opinion, we see three main benefits to renting out your property in the short-term vs long-term.

First, if the property is well suited for short-term rent (good location, condition, design) it is likely to provide a better financial return to the property owner than renting it out long-term. This obviously depends on how well the property is managed – what is the average rent per night and the occupancy in a given month as well as the additional expenses that come with short-term rent (housekeeping, amenities etc.)

Second, short-term rent provides increased flexibility to the property owner. By this we mean that the owner can block out a few days or weeks for his/her own use, for example, when family or friends are coming over for a visit to Vilnius. It also gives the property owner/manager an opportunity to see how the apartment looks on a more frequent basis and being more present allows to recognize and resolve any maintenance issues before they become real problems.

Finally, in our experience, short-term rent provides lower depreciation on the property and the furniture in it. In most cases, the guests are out of the apartment exploring the city and come back in the evening to watch some TV and go to bed, which decreases the over-use of some areas/furniture.

Should I manage on my own or find professional help?

If you really enjoy the process of communicating with guests and have one or two short-term rental properties, you might be fine with organizing everything on your own. However, if you don’t want to be disturbed during the night because of the WiFi being down or your friend suddenly cannot make it to help you with the cleaning after guests and you’re stuck at work, it might be a good idea to hire professional help.

A short-term rental management company, such as Houseys, can take all the hassle away from the process and as industry experts they know exactly how to optimize the listings to attract the right guests and get you the best return. Short-term rental management companies offer full end-to-end property management that includes setting up and launching the property in the correct way (and there is a correct way!), communication with guests, organizing and performing professional housekeeping & maintenance, daily monitoring of pricing & occupancy, monthly financial reports and so on.