Airbnb vs. Long-Term Rentals: Pros and Cons for Passive Income

Table of Contents

Key takeaways:

  • Dive deep into understanding Airbnb vs. long-term rentals, and choose the best option for your rental property
  • Associate with professionals who can assist you with your property management and minimise the risk on your investment. 

Are you confused between choosing Airbnb and long-term rentals for your passive income?

You’re not alone!

On one hand, as of January 2024, the UK rental market has seen an increase of 6.2% in prices.

Not too shabby, eh?

The other side is also shiny; as of November 2023, there were 223,200 active listings in the UK on Airbnb.

These numbers are merely the tip of the iceberg, suggesting there’s a whole lot more beneath the surface.

So choosing between Airbnb and long-term rentals can be overwhelming, right?

But fear not!

We’ll help you glide through the pros and cons of Airbnb and long-term rentals to ensure you achieve the best property results.

Let’s get started.

Pros and Cons of Long-Term Rentals

Before we jump to the pros and cons, you must know what long-term rentals are.

Long-term rentals are all about agreements that last six months or more.

Pros

To give you a headstart, if you’re considering the cash potential of long-term rentals against Airbnb, here’s an insight: reliable tenants with on-time rent payments can be the golden geese.

That’s not it.

Here are the pros of long-term rentals:

A Legal Safety Net

Once you get a long-term lease, you can ensure your financial stability and have peace of mind. 

How?

Because your tenants are legally on the hook for regular rent payments, which delivers a much-needed predictability to your cash flow.

Talking about predictability with long-term rentals, lets understand how it can benefit you.

Predictable Paydays

With the bank always ready to charge your mortgage each month, having a reliable tenant can be comforting. 

But you have to ignore the highest profit potential to accept assurance of consistent, timely payments.

Overall, long-term rentals tend to be the tortoises in the race: slow and steady, less impacted by the ever-changing winds of local regulations and HOA bylaws.

Less Tenant Troubles

Being an Airbnb host, you have to deliver fast turnaround on tenant inquiries. 

But with long-term rentals, you won’t lose any sleep over losing your superhost badge. 

The result?

Less urgency means fewer grey hairs.

Enjoy Your Free Time

Not playing 24/7 active host to your guests, you have a lot of free time if you choose long-term rentals. 

So, what to do with the more me-time?

You can explore your personal goals and expand your financial targets. 

Now let’s explore the cons.

Cons 

While long-term rentals can be the bedrock of a steady income for you, they come with their challenges that can make you desire the flexibility of Airbnb.

Here are the pitfalls you must know:

Selling Can Get Complex

With property flipping a new trend, you can find it hard to initiate the process with your long-term rental property. 

Selling your property can become a more tangled affair as it often involves negotiating with tenants.

So, what’s the solution?

You have to involve a solicitor, or if things get worse, you might have to compensate your tenant to get them to move out.

Limited Improvement Opportunities

Even if you want to renovate your rental property, it’s not that easy with tenants on your side. 

With Airbnb’s comings and goings, you’ve got plenty of opportunities to tinker and improve between guests.

But if you’ve got a long-term tenant who prefers things just so, you have to wait for their lease to end before you can start the renovation. 

Now that you know plenty about long-term rentals, let’s explore the trendy Airbnb.

Pros and Cons of Airbnbs 

Are you thinking, is Airbnb better than renting?

Then you have to explore both sides of the coin to make the final call.

Pros

Endless Connections

If you love interacting with humans, Airbnb offers you some great options. 

If you are managing properties nearby, Airbnb offers a gateway to global visitors, which allows you to meet someone new every few days.

Flexible Financials

Unlike fixed long-term rents, Airbnb allows you to ride the waves of market demand. 

You can drop prices to lure off-season travellers or hike them up during tourist peaks.

Protective Perks

Safety first, right?

Airbnb throws in a neat safety net with its Host Protection Insurance, which offers up to $1,000,000 in liability coverage for free.

Now let’s explore the cons.

Cons

Here are some of the cons to consider if you’re thinking of becoming an Airbnb host:

Not an Ideal Option for the Introverted

Hosting on Airbnb is about managing people. 

Your interactions can make or break your reviews. 

If you aren’t a natural extrovert, facing new faces and demands day in and out might seem daunting.

The Demands of Being on Call 

Transitioning from a traditional rental to an Airbnb means you’ll be doing a lot more than collecting rent. 

You have to handle tasks like changing linens, cleaning, and general upkeep.

Do both options sound overwhelming?

That’s where you can avail some professional help.

Choose Pluxa Property as Your Trusted Partner

We, at Pluxa Property, can help investors finalise the best rental strategy based on their goals.

As a leading UK property investment firm, Pluxa Property specializes in building and managing rental portfolios. 

Contact us now and our rental property experts to help you out. 

FAQs

Is Airbnb more profitable than a long-term rental?

Airbnb can potentially offer higher profitability due to dynamic pricing and higher rates for short-term stays. But there should be a high demand and occupancy rate.

Should I turn my rental property into an Airbnb?

Turning your property into an Airbnb could be a good choice if you’re located in a high-demand area.

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