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Vacation Rental Investment: Long Term vs Short Term

There are many big events in early 2018 at the MOA Arena like Paramore, Katy Perry Manila, & Bruno Mars Manila—what does that mean for vacation rental owners? Foreigners and locals are all going to look for places where to stay near MOA. And how does this help our comparison of long term & short term rentals? Because foreign or local, there are renters who stay for long and renters who splurge in short bursts.

condo near Moa

Initial Capital
There isn’t very much to discuss when it comes to initial capital on short term rentals or long term rentals; you’re basically renting out your condo unit—the same condo unit—to one of them so your capital expense is pretty much that. There is, however, a difference on how you market the unit, and this is where you may see a difference in capital as well. If you’re advertising your unit for where to stay near MOA on a short term basis, you’re basically advertising fairly constantly especially to be able to ensure that reservations are made and use of the unit is completely maxed out. If you are advertising for long term rentals on the other hand, you’ll be publishing ads less often, mostly only for the times when the unit will be vacant.
Potential ROI

This is also where you’ll find a difference in initial advertising investment—short term rentals (sometimes lasting for just overnight stays) can go for Php2-3K per night; higher depending on proximity to amenities and condo accesses, even more for if the condo is set up with superior features. But like with retail, the longer someone stays, the lower the daily computation should go. This also helps sales to close a rental deal. For long term rentals, a unit may go for Php30-50K for a month, again, pricing depending on key component features & amenity accesses. Long term has nominally lower profit but it also costs less to carry out a rental cycle.

where to stay near Moa

See: Outsourcing and Real Estate: Industries in Mutual Relationship

Targeting

Targeting a market is more a concern of sales but it would be prudent to know who you want to be contracting so you know where to advertise. Short term rentals have a good local audience as well as corporate potential. These are the market that need luxurious accommodation but have limited time like visiting foreign clients who fly in strictly for business, people looking for places to use as living quarters throughout a stag party, bachelorette shower, debut, or honeymoon duration, or travelers looking for place where to stay to see one show. Long term vacation rentals are more specially targeted, like for those who plan so see 2 or more shows at MOA arena, businessmen who will carry out long business tasks like seminar series, and wealthy foreigners or local businessmen & politicians who are seeking pleasure as well as other activities that require discretion & safety.

 

Property Input
Property Input is a real estate blog in the Philippines that talks about home, housing, lot, real estate, & property news, tips, and trends. Get the input you need on real estate here.

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