Q A Z Z O O . C O M

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Doing a cash flow analysis for a short term rental is not the same as doing the same exercise for a long term rental. In the long term analysis there are no financial line items for linens and silverware and all the other things that go into making a short term rental a cash flow cow. Cash flow is very important and the more responsive and more proactive the host is the better the chances of renting the property out on a continual basis. This become similar to running a miniature hotel and the more homes or spaces rented the more similar it becomes to large hotel and then eventually depending on the goals of the home owner it could likely become a small hotel chain.

trayThe only difference is that the amount of interaction the landlord has with his or her guest is minimal compared to the interactions that a host has with their guests. Guest expect more and they are the ones that are going to be reviewing your rooms, homes or Glamour tent online which is going to dramatically affect your next bookings and your vacancy rates. A landlord that doesn’t want to deal with people is far better to remain in the long term rental market and forego the additional cash flow in order to keep from doing what it is they least like to do.

It is rare to find an owner of a small Bed and Breakfast that doesn’t like people. Most go into the business as they like to engage and share their community with others. But like a pimple the more we touch it the worse it becomes. Long term landlords do not have to factor in new furnishings, electrical bills, free wifi or cable TV into their cash flow analysis. Try that as a host of short term rentals and we are going to quickly be wondering why our homes are not making more money.

Long term tenants don’t expect anything but a space to store their families and their collection of accumulated stuff. Short term guests expect that everything they had at home will be their for them minus the toothbrush. Long term renters expect to be left alone and only interface with the landlord when needed. Short term guests expect a certain amount of connectivity to the host as the host is seen as a concierge, maid, cook, caretaker all depending on the host and the guests expectations.

When renting out a room versus an entire home this connectivity between lodger and owner is multiplied. This can all be spelled out in the listing of the room/guest house/house but there will remain a dash of communications and hospitality that is not expected and would in fact be seen as intrusive when renting out on a long term basis. Could anyone imagine renting a home for a year and walking downstairs on the first morning to find the landlord in the kitchen flipping omelets? That would be cause for a visit from the local police. But in short term rentals of rooms this is common place and in some cases expected.

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