Pros and cons of buying as an investment for short term rent.

If you’ve already heard of the growing fashion for short-term rentals in the beach area, or have stayed in one before, buying a property in principle may seem like a very smart idea to use your money.

Today, specifically in the Panamanian Pacific area, many home owners use their properties through various platforms such as Airbnb or Vrbo to generate income. Now we will expand a little on the risks and advantages of using it as a real estate investment strategy and how convenient this is.

ADVANTAGES

– Renting on digital platforms generates more income per month than long-term rent in most cases.
– You can generate an automated check-in method to manage your reservations without being in the country.
– You can guarantee the good condition of your property with constant visits every time a guest ends their stay.
– You can use your property whenever you want.
– Low risk of not getting paid which can happen with long-term clients.
– Greater visibility in case your property is also for sale with the flow of guests. There will be more possibilities to sell.

DISADVANTAGES:

– Higher maintenance costs. for a property to be rented for as many nights as possible requires elements such as good quality furniture, decor, good wi-fi, cable or Netflix, and utilities must be included in the rental price.
– Some complexes maintain regulations on temporary rentals, that is, a minimum rental period is established.
– Income varies all the time. There is no certainty of how much money can be generated per month. In a long-term rental a monthly sum is established for at least one year.

If you are thinking of buying to rent, make sure that you are investing in the right property. It should be attractive to future tenants and the price at which you can get to rent this property is in accordance with the price at which you are buying. Above all, you must do your homework and check the local regulations for short-term rentals.

On the other hand, if you are thinking of buying a property to rent for a long period, it does not mean that you cannot generate a good income.

You should consider that properties in good condition and well maintained are always the first to rent and garner higher prices. At this time, we have a HIGH demand for rentals in the beach area, and prices have increased due to the low supply remaining. It is your time to rent!

You also want to make sure that the profile of clients you are looking for is the one that rents your property. Many people think that this can only be achieved by placing a higher price per night.

When a property is in very good condition, cozy, and offers good amenities which are included in the price such as a pool, BBQ, nearby golf course, sports fields or beach access. you can be assured that any guest would be happy to pay a very good price for your lodging.

Personally, in my years of working as a real estate broker and especially living on the beach, I have noticed a very interesting detail in the properties.

These properties at the time to come on the market for sale, achieve a great advantage over other properties since they offer the buyer the possibility of knowing how much they could generate in case of buying it.

This is beneficial not only because they generally achieve a better closing price than properties that do not have this benefit, but it also gives buyers who are not going to live permanently in the place an idea that they are buying a property with no risk of loss and, that can maintain itself with the income generated in rentals.