In order to help property investors decide whether to rent out your property for a shorter or longer period, here are the advantages and disadvantages of both:

 

Short Term Residential Leases (3 to 6 months)

Advantages

  1. Ideal for furnished properties that are a second family holiday home that would otherwise be unoccupied.
  2. If you are planning a renovation, being able to rent out a short term before builders and renovators start the project.
  3. Traveling for work or going on a long service leave holiday.
  4. Protected by Residential Tenancies Act.

Disadvantages

  1. Can be difficult to find short term tenants in certain locations.
  2. Can lead to tenants who don’t make your property their home and increase wear and tear if furnished.
  3. Slow off peak times can affect potential for occupancy and therefore reduce income earning potential.

 

Long Term Rental Tenancies Guide

 

Longer Term Residential Leases (12 months to 3 years)

Advantages

  1. Stable and secure income over a longer period of time.
  2. Likely to attract more families who are more stable long term renters.
  3. Less wear and tear on the property as tenants treat your property like their home.
  4. Longer term income means professional property management from a local real estate agent is more feasible.
  5. Property manager can ensure your property is well maintained.
  6. Lower maintenance costs due to less wear and tear on the property.
  7. Tenant must cover utility costs.
  8. Peace of mind having steady long-term income to allow you to focus on other investment opportunities.
  9. Tenants can be more carefully chosen than in shorter term scenarios.
  10. Protected by Residential Tenancies Act

Disadvantages

  1. No flexibility for use of property.
  2. More restricted with rental increases so income potential less lucrative.
  3. Problematic tenants can make things difficult and then you’re stuck with them for a longer time frame.
  4. More susceptible to lease break as tenants lives change – work/separation/travel/family.
  5. More restricted with rental increases so income potential less lucrative.

 

Long Term Rental Tenancies Guide

 

Need more advice? Be sure to talk to your local First National Real Estate office. Their dedicated property management team will provide you with advice on the local area, rental tenancy rates and other information you will find very useful to determine how long you should rent your investment property for.

 

Download our Property Management Guide

 

DISCLAIMER

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.