Five reasons to switch from short-term to long-term renting
Short-term rentals become increasingly popular in the real estate market in the last ten years, thanks to portals such as "Airbnb" and "Booking.com," as well as the changes in tourist behavior. This "democratization of tourism" has generated considerable revenue for property owners who have opted for this type of rental, primarily if their property is located in the city center, close to cultural institutions or historically significant sites. On the other hand, the market has become saturated, as far as Belgrade is concerned. For the owners, it became increasingly difficult to provide a steady income, which will make the whole business worthwhile.
And then a pandemic changed everything. Since the state of emergency was declared a month ago, all economic activity has gradually slowed down, including the real estate market. There is much speculation about the impact of the pandemic on the global economy, but opinions are different, and no one dares to make long-term forecasts.
But all experts agree on one thing: tourism is a branch of the economy that will suffer the most. And so, if you own a short-term rental apartment, here are five good reasons to change your business model:
1. Tourism will need time to recover
Current, cautious announcements are that the state of emergency in this form will last until the end of May, and after that, things will slowly and gradually return to normal. Countries in the region that are tourism-oriented have already said goodbye to the summer season. Also, it is assumed that tourists will think differently because of the economic uncertainty brought by the pandemic, so they will plan vacations differently or expect more for their money.
2. Secure income is better than nonexistent
Long-term rentals generate safe returns, especially if the property has an excellent price-quality ratio. Renting, as a faster and more active branch of real estate, has already begun to adapt to the crisis. Some owners lowered rent amounts by 10 to 20% during the state of emergency to retain tenants or to attract new ones. And they seem to succeed in that.
3. You will spend less time and money
If you run the short-term business yourself, then you already know that there is a lot of work involved. In long-term renting, you may eventually drop by the apartment once a month to collect rent and paid bills, unless you make arrangements with tenants to send you everything via e-mail.
4. Less contact with people
The nature of short-term renting is frequent contact with people. And the pandemic has brought some new social rules. City Expert, as the first online agency and unique real estate service, reformed the way apartments are rented. We introduced direct and electronic communication between owner and tenant, with a third party, customer service, available via phone. That means that the smallest number of people is involved in the rental process, just you and the tenant.
Our website attracts a lot of monthly visits because the service is free for the tenants. They regularly visit the site because they are used to a detailed multimedia presentation with all the info on each property. In short, thanks to the media presentation, you will have fewer visits to the property, but they will lead to faster rent, in our experience.
/In these circumstances, the owners themselves shoot the media material, read more here.
5. You can always change your mind
Even if you're one of those who believe everything is going to be good soon, turning to long-term renting can help you overcome your losses at the moment.
You can offer an apartment for rent in Novi Sad or Belgrade for a while, see how it works and whether you are comfortable with this method of generating income. You can withdraw your property whenever you want, as well as return it to the market in a matter of minutes.
No one knows what the world will look like after the coronavirus, but some think that nothing will be like it used to be. That is why we need to adapt to the circumstances. In that sense, switching from short-term to long-term renting can be the perfect solution. Give us a call.