Short-term or long-term rental – which to choose as an investor

Choosing a rental model is one of the most important decisions when investing in
real estate. Both short-term and long-term rentals have their advantages and
limitations. The key is to tailor the solution to your goals, capabilities, and
the nature of the apartment. From our experience, there is no single
universal model that works in every situation.

1. Two rental models – basic differences

Long-term rental is based on a fixed agreement with one tenant, usually for several or
several months. It is an organizationally simple, predictable, and less dynamic model.

Short-term rental involves making the apartment available for shorter stays.
It requires active management, price flexibility, and ongoing guest service, but offers
much greater ability to respond to demand and market changes.

2. Short-term rental – advantages and limitations

The biggest advantage of short-term rental is the potential for higher income,
especially in attractive locations and with the right strategy. It also provides
greater flexibility in price management and the ability to tailor the offer to different
guest groups: from couples and business travelers to families and groups of friends.

Challenges arise in the organizational area. Handling reservations, housekeeping,
technical service, and guest communication require experience and an operational
backbone. Without professional rental management, these can become a burden for
the owner.

Cooperating with a management company, however, allows the owner to have the apartment "off
their mind" for many years. The apartment is regularly cleaned, inspected, serviced, and
prepared according to high standards, as guests must be confident
that they are staying in a well-kept and safe place. Therefore, even if after some time
you decide to return to your apartment or sell it, you will find it in very
good technical and aesthetic condition.

3. Long-term rental – stability and predictability

Long-term rental is a solution that provides steady monthly income and
minimal owner involvement. It does not require frequent tenant turnover or ongoing
service, which is a major advantage for many investors.

On the other hand, this model offers limited flexibility. The rent price is set for
a longer period, and the apartment is not available to the owner during the term of the agreement.

The potential for income growth is usually lower than with short-term rental.

It is also worth remembering that changing long-term tenants can be costly and
time-consuming. It often involves commissions for agencies, vacancy periods,
and uncertainty about the apartment's condition after several years of use. Sometimes
refreshing or renovating costs significantly reduce the previously earned profit.

4. Comparison of income and costs

Short-term rental can generate higher income but involves a greater
number of operating costs, such as cleaning, technical service, or marketing activities.
Scale, occupancy, and pricing strategy are of key importance here.

Long-term rental features a simpler cost structure and stability,
but in the long term often does not fully leverage the property's potential,
especially in tourist and central locations. Additionally, costs related to tenant turnover,
including periods when the apartment remains unrented, should be taken into account.

5. Owner's level of involvement in both models

In long-term rental, the owner's involvement is limited to a minimum.
With short-term rental, without proper support, it can be significantly higher.

However, cooperating with a company specializing in short-term rental management
makes the owner's level of involvement comparable, and often even lower than
in long-term rental. Moreover, professional management is practically necessary, as short-term rental requires meeting specific organizational and formal standards.
This gives the owner peace of mind and confidence that everything
operates according to regulations and best market practices.

6. Flexibility and use of the apartment

One advantage of short-term rental is the possibility for the owner to use the apartment.
Owner stays allow access to the property without
giving up income generated from rentals.

An additional advantage is the ease of selling the property. An apartment in a
short-term rental model is not just a flat but a ready, operating investment product.
The ability to show real occupancy, income, and financial results greatly
increases its attractiveness. The lack of long notice periods and permanent tenants
means the sale can happen faster and often with better financial results.

In long-term rental, such flexibility practically does not exist.
The apartment remains at the tenant’s disposal for the entire contract period, and ending
the cooperation can be complicated. It often requires additional notarial securities,
which not every tenant agrees to, generating further costs and formalities.

7. How to choose a model suited to your investment goals

Choosing the right model should take into account location, apartment standards,
your investment horizon, and expected level of involvement. Short-term rental
is not a solution for everyone, but with proper organization and
experience, it can become a stable and predictable source of income.

How we approach this at Tyzenhauz

At Tyzenhauz, we do not treat short-term rental as a universal solution.
Before proposing a specific model, we analyze the property's potential and the investor’s real goals.
Thanks to our experience in managing rental apartments,
our expanded team, and knowledge of the local market, we can minimize
challenges related to short-term rental.

We take over all operational responsibilities, care for strategy, promotion, and service standards,
making even a more demanding model comfortable and predictable.
That is why many investors who initially considered long-term rental,
ultimately decide on short-term rental cooperation with us.