Differences between Short Term Rental Vs Long Term Rental

Let’s first distinguish one from the other. As we all know, long-term rentals have been a traditional form of housing. They are offered to tenants who choose to reside on a property for at least 6 months with a binding lease agreement. Property owners decide to collect a higher rent than the mortgage to generate monthly income that remains unchanged regardless of the ever-changing economic circumstance.  

On the other hand, the setup for a short-term rental is renting out a property to visitors or guests for a very short period. It works pretty much like hotels where guests can stay in for only a couple of days. This can viably extend to weeks or even months. Short-term rentals offer a cozy atmosphere as well as significantly cheaper nightly rates compared to hotels. This is why guests keep coming back to short-term rentals. 

Since short-term rentals have become widely used all over the world, rental arbitrage is another popular trend.  It has given a lot of nonproperty owners a steady stream of passive income by simply re-renting a unit and listing it on Airbnb, VRBO, or HomeAway. This is a wise, effective, and legal income-generating hustle. Just imagine having a side income from a property that you do not own. 

Rental Regulations in Canada

Traditional rental

Rental regulations in Canada vary by province, but some of the common rules include the requirement for a written lease agreement, limitations on rent increases, and the right to privacy for tenants. Additionally, landlords are required to maintain their properties in a safe and habitable condition, and tenants have the right to request repairs or file complaints if necessary. By understanding the rental rules in Canada, both landlords and tenants can ensure a fair and transparent rental process.

Airbnb Regulations

To comply with the diverse short-term rental regulations across Canadian cities, it’s crucial to review each law and ensure your requirements are met. For a comprehensive understanding of the legislation and policies governing short-term rentals, we recommend checking out our previous article titled “Airbnb Rules in Canada.”

Advantages of Long-Term Rentals in  Canada:

Below are the advantages of operating a long-term or traditional rental property in Canada:

• Record-high population – Canada recorded its highest annual population growth rate at 2.7% for the first time last year since 1957. This was attributed to migration contributing at least 95% of the number of people increase.
• A steady stream of income – You are ensured to have a steady and regular monthly income immune to erratic economic conditions. The average monthly rent in Canada is $2,004.
• Steady operating costs – You do not need to shell out money upfront for furnishings since the tenants will most likely have their own.
• Laid-back management – You will have less interaction with your tenants, and you do not need to be hands-on with managing your property. This is risky, however, since damages on the property can get worse if they’re left unattended. 

Advantages of Short-Term Rentals in Canada:

On the other hand, here are the perks that short-term rentals can offer to Airbnb hosts in Canada:

• Positive growth in travel and tourism industry –  In the next ten years, the GDP of the local tourism sector is poised to increase by an average of 4.4% each year, which is more than double the 1.9% growth rate of the country’s economy as a whole. This growth is expected to bring the industry’s GDP to almost CAD213 billion, which constitutes 6.8% of the entire economy.
• Flexible pricing – You can adjust the nightly rate depending on seasonality or market demand.
• Experience managing the property – Building connections with people by hosting different guests. If this is not your thing, you can still manage the property remotely via automated management tools.
• Feel more control over the property –  Since guests only stay in for a limited time, you can easily make changes to your property. Without getting worse, any damages can be repaired in no time and also be covered by Airbnb insurance. 

Difference between Short Term Rental and Long Term Rental

Let’s first distinguish one from the other. As we all know, long-term rentals have been a traditional form of housing. They are offered to tenants who choose to reside on a property for at least 6 months with a binding lease agreement. Property owners decide to collect a higher rent than the mortgage to generate monthly income that remains unchanged regardless of the ever-changing economic circumstance.  

On the other hand, the setup for a short-term rental is renting out a property to visitors or guests for a very short period. It works pretty much like hotels where guests can stay in for only a couple of days. This can viably extend to weeks or even months. Short-term rentals offer a cozy atmosphere as well as significantly cheaper nightly rates compared to hotels. This is why guests keep coming back to short-term rentals. 

Since short-term rentals have become widely used all over the world, rental arbitrage is another popular trend.  It has given a lot of nonproperty owners a steady stream of passive income by simply re-renting a unit and listing it on Airbnb, VRBO, or HomeAway. This is a wise, effective, and legal income-generating hustle. Just imagine having a side income from a property that you do not own. 

Rental Regulations in the United Kingdom

Long-Term Rentals

As a landlord in the United Kingdom, you have several legal responsibilities that you must comply with. These include:

1. Ensuring that your rentalproperty is safe and habitable.
2. Making any necessary repairs and maintenance in a timely manner.
3. Complying with all relevant laws and regulations, including tenancy deposit protection schemes, fire safety regulations, and health and safety regulations.
4. Providing essential services such as water, gas, electricity, and heating.
5. Collecting rent from tenants in a timely manner and ensuring that you have a written tenancy agreement in place that outlines the terms of the tenancy.
6. Giving tenants proper notice if you need to access the property, make repairs, or end the tenancy.

Short-Term Rentals

As short-term rental regulations vary by city in the UK, it’s important to review each law to ensure that your requirements are met. To gain a better understanding of the overall legislation and short-term rental policies, kindly refer to our previous article A Guide to Starting an Airbnb Business in the United Kingdom.

Advantages of Long-Term Rentals in The United Kingdom:

Below are the advantages of operating a long-term or traditional rental property in the United Kingdom,:

• Growing population – While it does not enjoy very significant population growth, the UK has over 67 million people as of 2023. This number increased at 0.34% from 2022.

• A steady stream of income – You are ensured to have a steady and regular monthly income immune to erratic economic conditions. The average house rental price in the UK is £1143 per month.

• Steady operating costs – You do not need to shell out money upfront for furnishings since the tenants will most likely have their own.

• Laid-back management – You will have less interaction with your tenants, and you do not need to be hands-on with managing your property. This is risky, however, since damages on the property can get worse if they’re left unattended. 

Advantages of Short-Term Rentals in the United Kingdom:

On the other hand, here are perks that short-term rentals can offer to Airbnb hosts in the United Kingdom:

• Strong travel and tourism industry – The travel and tourism industry plays a significant role in the United Kingdom economy, contributing substantially to its GDP. It is estimated that in 2021, this sector generated around £131.5 billion.

• Flexible pricing – You can adjust the nightly rate depending on seasonality or market demand.

• Experience managing the property – Building connections with people by hosting different guests. If this is not your thing, you can still manage the property remotely via automated management tools.

• Feel more control over the property –  Since guests only stay in for a limited time, you can easily make changes to your property. Without getting worse, any damages can be repaired in no time and also be covered by Airbnb insurance.