A Crash Course in Airbnb Long-term Rentals for Your Property

While Airbnb has become synonymous with short-term stays, long-term Airbnb rentals are another avenue that more hosts are starting to explore and leverage. For guests looking for a home away from home, fully furnished rentals are the perfect alternative to staying put.

The COVID-19 pandemic had a big role to play in this shift. Initially, when the demand for short-term rentals dropped, many Airbnb hosts introduced mid or long-term stays in order to keep their businesses afloat. Fast-forward a couple of years and more travelers can choose a long-term stay over a short weekend, thanks to flexible working arrangements.

Plus, for too long guests were forced by travel restrictions to limit their travel plans to destinations that are only a few hours away. With most countries returning to normal, guests are making up for lost time and ready to embark on far-from-home missions that they had to postpone or never had the time for before.

Though, long-term rentals aren’t necessarily just a travel trend. With the right strategy and systems in place, advertising long-term Airbnb rental options can help hosts to boost occupancy and generate consistent rental income.

Read on to discover what long-term Airbnb rentals are and what benefits they can bring to your vacation rental business.

What is the Difference Between Long-term and Short-term Rental Stays?

According to Airbnb, a regular short-term stay is fewer than 28 days. Once a stay becomes 28 days or longer, it will count as long-term or monthly Airbnb rentals. However, not all rentals on Airbnb offer long-term bookings, as hosts decide whether to make their properties available for longer stays.

The reasons for renting might also differ between short and long-term stays. Short-term renters usually look for a quick break or vacation. They generally return home, once their booking is over.

On the other hand, long-term Airbnb rentals tend to attract people who are traveling for work (like medical professionals) or study purposes. Lately, long-term Airbnbs have also found favor among remote workers. In this case, the guest is not necessarily traveling to the destination for work, but rather to escape from the mundane while working remotely.

What Changes Have Been Introduced for Long-term Rentals on Airbnb?

To help guests find long-term rentals, they can search for monthly rentals on Airbnb. Rentals that offer longer stays will appear for bookings that are 28 days and longer in length and help distinguish between weekly and monthly stays. The listings of these long-term Airbnb rentals will also list amenities for monthly rentals so guests can live comfortably during their extended stay.

Why Are Long-term Rentals Becoming Popular?

Since 2019, the number of extended stays has increased by more than 30%. What’s more, online data suggests that this number is only expected to increase more in the next few years.

So, why have long-term Airbnb rentals found favor among guests as well as hosts?

For guests

The coronavirus pandemic has changed how we approach daily life and traditional vacations. When international travel was paused in most countries, many people started exploring alternative ways to holiday.

As a result, “nearcations” or “staycations” became a popular solution. Increasingly more travelers started to embrace domestic travel as it still allowed them to enjoy a vacation. It might not have been the international trip that they had in mind, but travelers realized that their own country could offer other attractions. Plus, as traveling domestically is generally cheaper, travelers can afford to extend their travel dates and stay longer by finding nearby monthly rentals.

The pandemic has also affected businesses and the housing market. Many people are currently working from home and will continue to do so in the long term. Work-from-home professionals are booking vacation rentals that offer a “home office” and strong Wi-Fi.  Dedicated working spaces allow them to work while still enjoying a change of scenery.

College students and interns may also book long-term rentals for a monthly stay. This will offer them more privacy than hotels and private dormitories.

For hosts

Long-term and monthly rentals provide a reliable income stream for hosts experiencing a drop in bookings. Although hosts can usually earn more from short-term renting, it can become a problem if bookings drop.

Long-term renting can solve the issue of a lower occupancy rate. Many guests who book longer-term rentals are looking to stay for at least a month, if not longer. Long-term Airbnb rentals can help hosts sustain their business during their quieter months.

Longer rental periods can also reduce hosts’ workload, as they won’t need to spend as much time and money on marketing their rentals and cleaning.

Long-term Airbnb Rentals: The Pros and Cons

While offering an extended stay can work in hosts’ favor, there are some potential drawbacks that need to be weighed up too. To help you decide if you should start offering monthly stay options (or possibly even stays for multiple months), here are the main pros and cons to consider.

Pros

A steady stream of income

Long-term stays can offer Airbnb hosts a consistent stream of revenue (even during low season and slow months). As your revenue is likely to remain steady throughout the year, it can help support your earnings if you’ve been experiencing a decline in bookings. It will also assist with fixed expenses like any fixed monthly fee or house expenses.

Less time-consuming

With long-term rentals, there are fewer management responsibilities. Tasks like guest communication, check-in and check-out, and online marketing reduce when you are only renting to one guest at a time, compared to short-term renting. Generally, once the guest has checked in and settled into the rental, you will only need to communicate with them if an issue arises.

Fewer amenities

Long-term rentals offer you more flexibility regarding amenities as you can choose whether to furnish (or partly furnish) your rental. In fact, many tenants bring their own furniture when they are looking for a longer lease. This can save you the cost of buying extra furnishings for your rental.

On the other hand, with short-term renting, it’s necessary to have your rental fully furnished. What’s more, the competition can be quite intense in the short-term rental industry. This is because the guest-to-rental ratio often swings in favor of guests who can take their pick of rentals. This means that you will also need to spend extra money on luxury amenities like a hot tub if you want to set your online listing apart.

This is not as common for long-term Airbnb rentals, as guests have different amenity requirements. Guests looking to rent for longer will be in search of essential amenities such as a dishwasher rather than a hot tub or firepit.

Cons

Less freedom

If you rent out your property for multiple months, you will have less freedom to manage your rental as you like. Long-term renters are paying for space and privacy. This means that you can’t manage your rental as you like when it suits you.

For example, you won’t be able to arrive at your property to do maintenance or inspection work without calling ahead. You also won’t be able to use your Airbnb rental over a weekend or during a holiday, if you have guests staying in it.

Smaller profit margin

Instead of charging a nightly rate, you will most likely charge a fixed fee per month. Alternatively, you will most likely offer discounts for weekly or monthly stays.

This means that you will have less potential to maximize your profit. If you used to bump up the price during high-season periods, you will no longer be able to implement this pricing strategy.

That being said, it is not necessarily all doom and gloom. While you will probably earn less if you rent out your property on a long-term basis during the high season, there is the potential to increase your earnings during the low season.

More guest screening required

With short-term renting, your guests are likely to spend a few days or weeks at most at your property before leaving. Because they pay upfront, there is no risk of payment defaults.

Unfortunately, for long-term Airbnb rentals, there is a risk of payment defaults. Before accepting any guests in a long-term rental agreement, it’s advisable to perform a credit check on your guests. This can become time-consuming, especially if you have several different guests interested in your rental property.

Should I Include Long-term Rentals in My Airbnb Business?

Your rental’s location

If your vacation rental is located in a tourist hotspot, you might want to reconsider long-term renting or offer it for only part of the year. It’s likely that your listing will get a lot of traffic and bookings during the high season. In that case, it might only be worthwhile offering a long-term stay during your low season.

The past year’s total net revenue

Looking at the net revenue you have made within the year can help you assess if you are still making enough to cover your monthly overhead costs and meet your profit margins by means of short-term renting alone. If you are falling short, long-term renting could be a suitable means for you to bring in more revenue.

The maximum net revenue you could make from long-term renting over a year

Once you have assessed your net revenue over the past year, do an estimation of how much you could earn over a year via long-term renting.

To calculate what you should be charging, take a look at what similar long-term Airbnb rentals in your area are charging to get an idea. Then, compare this total with what you have already earned from short-term renting to decide if you could be earning more.

If you only want to offer long-term renting during your low season, only compare your net revenue from your low season to how much you could make in the low season via a longer rental period.

How to Turn Your Property into an Airbnb Long-term Rental

Before you are ready to start advertising Airbnb monthly rentals, you first need to change your online listing and make a few changes to your actual property. Here are a few key steps you will need to complete:

Optimize your Airbnb listing to include longer bookings

To market your rental to guests looking for longer bookings, you will need to optimize your Airbnb listing as needed. There are three ways you can optimize your listing to encourage them to book your rental:

1. Enable longer bookings for your rental. Ensure that the trip details section in the availability of your listing has been updated, so it can accept bookings longer than 28 days.
2. Set up weekly and monthly discounts on your listing. Offering discounts on your monthly prices will be highlighted to guests in their search results, and encourage them to book with you.
3. Use a long-term cancellation policy. Any cancellations made for long-term stays within 48 hours of booking, and at least 28 days before the booking date, will be refunded to guests in full. After 48 hours any cancellations will be refunded, minus the first 30 days and the service fee. If guests cancel their booking during their stay, they will need to pay for the 30 days following the cancellation date, or up to the end of their remaining stay if it’s less than 30 days.
4. Ask your guests to sign a rental agreement. To minimize risks associated with extended stays, ask your guests to sign a rental agreement. Make sure to mention this requirement in your house rules so your guests won’t be surprised after they finalize a booking.

Make your rental long-term friendly

1. Make any necessary improvements to your rental. For guests looking for long-term rentals–essentially looking for a home away from home–fully furnished rentals are a must.
   They will opt for properties that offer essential amenities.

Amenities for monthly rentals include things like a laundry machine, a fridge, and a stocked kitchen. If you would like to attract working professionals with your monthly rental, popular amenities would be things like a workstation and good Wi-Fi. Dedicated working spaces are a great way to attract that market.

• Provide additional instructions and recommendations. It’s important that guests have a detailed manual or welcome book with instructions on things like what days the garbage is collected, the schedules of any gardeners or maids, etc. Updating your welcome book with useful information, like nearby gyms to join or recreational activities to do, can also help your guests enjoy their stay more.

Automate Your Rental Property Management

There is no right or wrong answer on whether you should offer long-term rentals to your guests. It all depends on your business needs and your strategy for moving forward. If you’re unsure, you can run a test phase in which you list your rental for long-term occupancy and see if you get any queries or bookings.

Speaking of tests, it is also a good idea to put third-party software solutions and tools to the test. Although long-term renting may not have as many daily tasks, using vacation rental software, such as iGMS, can help you to take your rental management to the next level.

Offering a full range of functions essential for successful property management, iGMS will set your business up for success by helping you with:

• Managing multiple accounts and listings on the major vacation rental platforms
• Organizing your messages and email into a single feed and using automated templates and triggered messaging to improve guest communication
• Automating the process of guest reviews 
• Managing direct bookings using a direct booking management toolkit
• Receiving payouts and creating invoices by connecting your Stripe account to iGMS
• Creating your own direct booking website in minutes
• Sharing daily schedules with your team and auto-assigning tasks.
• Tracking your business growth via your consolidated Dashboard

Many hosts are already using iGMS to set themselves apart from their competitors and provide better service to guests. Are you ready to give it a try?