Short Term Vacation Rental vs Long Term Rental: What is good for Florida?

Florida’s vibrant tourism and booming population create a dynamic landscape for property owners. The Sunshine State offers a tantalizing choice: capitalize on the constant influx of visitors with lucrative short-term rentals, or establish a steady income stream with long-term leases. 

From the bustling beaches of Miami to the family-friendly attractions of Orlando, the potential for both rental strategies is undeniable. But, in this unique Florida market, which path truly maximizes your return?

With seasonal tourism surges, diverse demographics, and varying local regulations, navigating the short-term vs. long-term rental decision requires a nuanced approach. Is it the allure of high nightly rates during peak seasons that makes short-term rentals the ideal choice, or does the stability of long-term tenants provide a more reliable foundation for your Florida investment? 

This exploration isn’t merely about profit margins; it’s about understanding Florida’s specific market nuances, aligning your rental strategy with your unique goals, risk tolerance, and the diverse opportunities this state provides. Let’s delve deep, unraveling the complexities and uncovering the true potential of both rental investments in the Sunshine State.

What is a Short-Term Rental?

A short-term rental is a property that is rented out for a short duration, typically ranging from a few days to a few months. These rentals are commonly used for vacation stays, business trips, or temporary housing needs. Platforms like Airbnb and Vrbo have popularized short-term rentals by allowing property owners to rent out their spaces on a nightly or weekly basis.

Key Features of Short-Term Rentals:

• Typically rented for less than 30 days (varies by location).
• Often listed on platforms such as Airbnb, Vrbo, and Booking.com.
• Can generate higher income but may experience fluctuating occupancy rates.
• Requires frequent management, including guest communication, cleaning, and maintenance.
• Subject to local regulations, which may impose restrictions on short-term rentals.

What is a Long-Term Rental?

A long-term rental is a property leased to tenants for an extended period, usually six months to a year or more. This type of rental provides landlords with a steady and predictable income while offering tenants a more permanent housing arrangement.

Key Features of Long-Term Rentals:

• Lease agreements typically last 6 months, 12 months, or longer.
• Tenants use the property as their primary residence.
• Generates consistent, predictable rental income.
• Requires less frequent management and lower turnover costs.
• Generally not subject to the same strict regulations as short-term rentals.

Short Term Vacation Rental vs Long Term Rental: Pros and Cons

When deciding between short-term and long-term rentals, property owners must weigh various factors to determine the best strategy for their investment goals. Both options offer distinct advantages and challenges. Let’s see them

5 Pros of Short-Term Rentals/Vacation Rentals

Investing in a short-term rental or vacation rental property can be a highly profitable venture, especially in tourist-heavy areas. Compared to traditional long-term rentals, short-term rentals offer unique benefits that appeal to property owners looking to maximize income and flexibility. Below are five major advantages of operating a short-term rental.

1. Higher Income Potential

One of the most significant benefits of short-term rentals is the ability to generate more income per night compared to long-term leasing. In popular tourist destinations, short-term rental owners can charge a premium rate, especially during peak seasons.

For example, a long-term rental might bring in $2,000 per month under a 12-month lease, whereas a short-term rental charging $150 per night could make $4,500 per month if occupied for just 30 days. Even when accounting for vacancy periods, short-term rentals can often yield higher overall returns.

Additionally, dynamic pricing tools allow owners to adjust rental rates based on demand, local events, and seasonal trends. This flexibility ensures they are always charging competitive prices to maximize revenue.

2. Greater Flexibility for Owners

Short-term rentals give property owners more control over their properties compared to long-term leases. Unlike traditional rentals, where tenants occupy the property for months or years, short-term rentals allow owners to:

• Adjust rental prices frequently based on demand.
• Block off dates for personal use (e.g., a vacation home that is rented out when not in use).
• Temporarily switch between short-term and long-term rentals depending on market conditions.

This flexibility is especially useful for homeowners who travel often or want the option to sell their property without waiting for a lease to end. Additionally, if the property market slows down, owners can easily switch from vacation rentals to long-term leasing to maintain stable income.

3. Regular Maintenance & Property Upkeep

Short-term rentals require frequent cleaning and maintenance due to the high turnover of guests. While this might seem like a challenge, it actually helps preserve the property’s condition in the long run.

With regular guest stays, owners or property managers typically:

• Inspect the property more frequently than they would with a long-term tenant.
• Identify and fix minor issues (e.g., leaks, broken appliances) before they become major repairs.
• Ensure deep cleaning is done regularly, preventing long-term damage from neglect.

In contrast, long-term rentals may go months or even years without inspections, allowing unnoticed damages to accumulate. This makes short-term rentals a great option for owners who want their property well-maintained.

4. Tax Benefits & Deductible Expenses

Short-term rental owners can take advantage of various tax deductions, reducing their taxable income and increasing profitability. Many of the costs associated with operating a vacation rental are considered business expenses, meaning they can be deducted from total income.

Common tax-deductible expenses include:

• Property management fees
• Cleaning and maintenance costs
• Utilities and Wi-Fi
• Furniture and decor upgrades
• Marketing and listing fees (e.g., Airbnb, Vrbo service fees)
• Mortgage interest (if applicable)

Additionally, if the property is rented out for fewer than 14 days per year, the income may be completely tax-free, depending on local tax laws. Consulting a tax professional can help owners maximize their deductions and optimize their tax strategy.

5. Higher ROI in Prime Locations & Peak Seasons

If a property is located in a tourist-heavy area, business hub, or near major attractions, short-term rentals can be significantly more profitable than long-term rentals.

• A beachfront condo in Miami, for example, could generate $200+ per night during peak season, leading to huge seasonal profits.
• Properties near major sporting events, concerts, or conventions can see surges in demand, allowing owners to increase prices.
• Short-term rentals in business districts cater to corporate travelers who prefer staying in a home rather than a hotel.

By leveraging seasonal demand, special events, and location advantages, short-term rental owners can outperform traditional landlords in terms of return on investment (ROI).

Cons of Short-Term Rentals (Airbnb, Vrbo, and Vacation Rentals)

While short-term rentals offer flexibility and high-income potential, they also come with significant challenges. Managing an Airbnb, Vrbo, or any other vacation rental property requires time, effort, and financial planning. Below are some of the key disadvantages of short-term rentals that property owners should consider.

1. Long Vacancies Pose a Financial Risk

One of the biggest risks of short-term rentals is inconsistent occupancy, especially in seasonal markets. Unlike long-term rentals with stable monthly income, short-term properties depend on guest demand, travel trends, and competition.

During off-peak seasons, rental income can drop significantly, leaving the property vacant for weeks or even months. In high-tourism areas, property owners must compete with dozens of other listings, which can make securing guests even more difficult.

Additionally, long vacancies can pose another major risk—undetected maintenance issues. With no regular tenants in place, problems such as plumbing leaks, electrical failures, or structural damage may go unnoticed for extended periods. Without immediate attention, these small issues can escalate into costly repairs, reducing overall profits.

2. Increased Wear and Tear on the Property

Short-term rentals experience more wear and tear compared to long-term rentals due to frequent guest turnover. The constant check-ins and check-outs bring more people into the space, leading to:

• Frequent movement of furniture, causing scratches and scuffs on floors and walls.
• Accidental spills and stains on carpets and upholstery.
• More frequent use of household amenities, resulting in faster deterioration of appliances.

Moreover, linens, towels, and pillows require constant washing and replacement to meet guest expectations. The high standard of cleanliness required for Airbnb and Vrbo listings means owners must invest heavily in cleaning services, repairs, and regular refurbishments.

These additional operational costs can significantly cut into the overall profitability of a short-term rental business.

3. Frequent Neighbor Complaints & HOA Issues

Short-term rentals often lead to conflicts with neighbors, especially in residential areas. Guests may not be familiar with the neighborhood norms, leading to complaints about:

• Excessive noise from late-night gatherings.
• Parking congestion when guests bring multiple vehicles.
• Trash accumulation due to frequent guest turnover.

In some cases, Homeowners Associations (HOAs) and local communities impose restrictions on short-term rentals to maintain neighborhood quality. Owners who fail to comply with community regulations may face fines, legal challenges, or even bans on short-term rentals in their area.

4. High Involvement & Time-Intensive Management

Unlike long-term rentals that require minimal oversight, short-term rentals demand constant attention. Owners must actively manage:

• Guest communications, including booking inquiries and check-in/out coordination.
• Cleaning and maintenance between stays to meet guest expectations.
• Emergency guest concerns, which may arise at any hour.

This level of involvement makes short-term rentals a hands-on investment, rather than passive income. If an owner does not want to handle these responsibilities personally, they may need to hire a property management company, which can charge 10% to 30% of rental revenue—further cutting into profits.

5. Urgent Maintenance & High Operating Costs

Short-term rental properties require immediate responses to maintenance issues, as delays can negatively impact guest reviews and future bookings.

Unlike long-term rentals, where minor repairs can be scheduled in advance, short-term rental owners often have to:

• Pay for emergency repair services at a higher cost.
• Conduct frequent inspections to keep the property in top condition.
• Replace essential items (like towels, linens, and kitchenware) far more often than in a traditional rental.

Keeping a short-term rental in excellent condition is critical for maintaining a high guest rating, but it comes with increased operational expenses.

6. Market Uncertainty & Legal Risks

The short-term rental market is highly volatile and subject to changes in tourism trends, economic shifts, and global events. Property owners relying solely on short-term rentals must be prepared for:

• Seasonal fluctuations in demand and pricing.
• Unexpected travel restrictions or economic downturns, such as the impact of COVID-19.
• Local government regulations, which may impose limits or bans on short-term rentals.

Many cities are introducing new laws to regulate Airbnb and Vrbo rentals, including:

• License requirements for short-term rental operators.
• Restrictions on the number of nights per year a property can be rented.
• Higher taxes and fees to discourage short-term leasing.

Failure to comply with changing regulations can result in fines, legal action, or even forced closure of short-term rental businesses.

7. Limited Tenant Screening & Higher Risks

Unlike long-term rentals, where landlords can screen tenants thoroughly, short-term rental platforms provide only basic guest verification.

Most platforms like Airbnb and Vrbo verify:

• Email and phone numbers
• Government ID (optional on some listings)

However, these verification steps do not provide insight into a guest’s rental history, financial stability, or behavior patterns. As a result, owners may unknowingly rent to:

• Irresponsible guests who damage the property.
• Disruptive tenants who violate house rules.
• Fraudulent bookings, leading to security risks.

Since short-term guests have no long-term commitment, they may not treat the property with the same care as long-term tenants, increasing the risk of damage or unauthorized parties.

Additionally, if a guest refuses to leave, property owners may struggle to evict them, as short-term rentals often fall into legal grey areas regarding tenancy laws.

Pros and Cons of Long-Term Vacation Rentals

Long-term vacation rentals, also known as monthly or extended-stay rentals, offer property owners an alternative to short-term rentals by providing consistent income with reduced management responsibilities. These rentals typically involve leases of six months or more and cater to business travelers, digital nomads, and relocation tenants. While long-term rentals come with financial stability and lower operational demands, they also have some limitations compared to short-term vacation rentals.

Pros of Long-Term Vacation Rentals

1. Steady and Predictable Income

One of the biggest advantages of long-term vacation rentals is the consistent and stable income they provide. Unlike short-term rentals that fluctuate due to seasonal demand and occupancy variations, long-term rentals generate fixed monthly rental payments throughout the lease term.

This financial stability allows property owners to:
Cover mortgage payments and operational expenses reliably.
Plan long-term investments without worrying about vacancy gaps.
Avoid market uncertainty caused by tourism trends or economic downturns.

Since tenants commit to longer stays, property owners don’t have to worry about frequent fluctuations in rental income.

2. Lower Turnover and Vacancy Rates

Unlike short-term rentals, which require constant marketing and guest management, long-term vacation rentals reduce turnover and minimize the hassle of frequent tenant changes.

With long-term rentals:
You don’t have to re-list the property every few days or weeks.
There are fewer vacancy periods, reducing potential income loss.
Tenant stability leads to less wear and tear compared to short-term guests.

By securing reliable tenants for several months or even years, property owners save on advertising, cleaning, and administrative costs associated with frequent turnover.

3. Reduced Management and Maintenance Workload

Long-term vacation rentals require less hands-on management compared to short-term stays. Since tenants stay for months or years, property owners don’t have to manage frequent guest check-ins, cleanings, and daily maintenance issues.

This reduces the workload related to:
Coordinating guest arrivals and departures
Frequent deep cleaning between bookings
Managing a dynamic pricing strategy
Handling last-minute guest requests and inquiries

Additionally, long-term tenants are often responsible for minor maintenance (such as changing light bulbs or basic appliance upkeep), further reducing the property owner’s involvement.

4. Tenants Cover Utility Costs

Unlike short-term vacation rentals where owners typically pay for utilities, long-term tenants are usually responsible for covering their own electricity, water, internet, and gas bills.

This means property owners can:
Save hundreds of dollars per month on utility expenses.
Avoid fluctuations in operational costs caused by high guest usage.
Prevent overuse of utilities, as long-term tenants are more conscious about consumption.

By transferring these expenses to tenants, property owners maximize their net income from the rental property.

5. Fewer Legal and Regulatory Restrictions

Many cities and municipalities have strict regulations on short-term rentals, such as:
Caps on the number of rental nights per year.
Special permits and licensing requirements.
Additional hotel or occupancy taxes.

Long-term vacation rentals, on the other hand, face fewer legal restrictions in most areas. Since they are categorized as traditional leasing agreements, they are generally:
Exempt from short-term rental bans and restrictions
Not subject to hotel or short-term rental taxes
Easier to operate legally without permits

This makes long-term rentals a more stable and risk-free investment in areas with strict Airbnb or Vrbo regulations.

Cons of Long-Term Vacation Rentals

1. Lower Income Potential Compared to Short-Term Rentals

While long-term rentals offer financial stability, they typically generate lower monthly income compared to short-term vacation rentals. In high-demand locations, short-term rentals can charge 2-3 times more per night than a long-term lease.

For example:

• A short-term rental might earn $200 per night ($6,000 per month if fully booked).
• A long-term rental in the same area might only earn $3,000 per month due to fixed lease rates.

Since long-term leases have locked-in rates, property owners lose the ability to adjust pricing based on peak seasons or high-demand events.

2. Less Flexibility for Property Owners

Long-term rentals limit an owner’s flexibility, as tenants sign leases for months or years at a time.

This means:
Owners can’t use the property for personal stays whenever they want.
It’s harder to adjust rental rates based on market demand.
If the rental market increases, owners are stuck with lower rates until the lease ends.

Short-term rentals, on the other hand, allow property owners to block off dates for personal use and increase rental prices during peak seasons.

3. Potential Issues with Long-Term Tenants

While long-term tenants provide stability, they also come with risks that short-term guests do not. Some common challenges include:

Non-Paying Tenants – Unlike short-term guests who pay upfront, long-term tenants may fall behind on rent payments, leading to eviction hassles.
Property Damage – A problematic tenant may neglect the property or cause significant damage, which is harder to address than minor wear from short-term guests.
Eviction Process – Removing a long-term tenant requires formal eviction proceedings, which can be time-consuming and expensive.

With short-term rentals, property owners have more control over who stays in their property and can quickly remove disruptive guests without legal complications.

4. Maintenance Responsibilities Can Build Up

While long-term rentals require less frequent cleanings and check-ins, maintenance issues can go unnoticed for extended periods.

• Tenants may not report small problems (e.g., leaks, appliance issues), leading to costly repairs over time.
• Unlike short-term rentals that receive regular inspections, long-term tenants might not maintain the property as well.
• If a tenant causes damage, the owner may not discover it until after the lease ends, making it harder to address issues quickly.

Short-term rentals, by contrast, undergo frequent inspections between guest stays, ensuring the property is kept in optimal condition.

5. Less Demand in Tourist Areas

In some locations, long-term rentals may not be as profitable or in demand compared to short-term vacation rentals.

For example:

• A beachfront condo or ski resort cabin may attract more tourists than long-term tenants.
• Corporate housing or business districts may have better demand for short-term stays than long-term leases.
• Properties near popular events (festivals, conventions, etc.) may generate higher profits through short-term rentals.

Property owners should carefully analyze their local market to determine whether long-term rentals will attract consistent demand.

Short-Term Vacation Rentals vs Long-Term Rentals: At A Glance

Here’s a detailed comparison table of Short-Term Vacation Rentals and Long-Term Rentals:

Feature	Short-Term Vacation Rental	Long-Term Rental
Rental Duration	Typically a few nights to a few weeks	Usually six months to a year or more
Income Potential	Higher per-night rates but fluctuating occupancy	Lower per-month rent but stable income
Occupancy Rate	Seasonal demand, can vary significantly	Generally stable with fewer vacancies
Management Effort	Requires frequent cleaning, maintenance, and guest communication	Less hands-on management, with periodic maintenance
Legal & Regulatory Considerations	Subject to zoning laws, HOA rules, and short-term rental restrictions	Generally more stable legal framework, but may have rent control regulations
Tenant Screening	Minimal screening as bookings are often instant	Requires detailed tenant background checks
Furnishing Requirements	Fully furnished with amenities like Wi-Fi, kitchen supplies, and linens	Usually unfurnished or semi-furnished, tenant brings their own belongings
Property Wear & Tear	Higher due to frequent guest turnover	Lower as long-term tenants treat the property as their home
Marketing & Advertising	Needs continuous marketing on platforms like Airbnb, Vrbo, Booking.com	Less frequent advertising, often listed on rental websites
Flexibility	Owner can use the property when not rented	Fixed lease terms with limited flexibility
Security Deposit & Liability	Higher risk of property damage; short-term insurance needed	Standard security deposit; lower risk of property damage
Maintenance & Utilities	Owner covers all utilities and maintenance costs	Tenants often pay for utilities and minor maintenance
Profitability Considerations	High earning potential in tourist hotspots but dependent on demand	Consistent income, less impacted by tourism trends
Tax Implications	Subject to hotel taxes and short-term rental regulations	Eligible for long-term rental tax deductions and depreciation benefits

Final words

Deciding between short-term vacation rentals and long-term rentals depends on your financial goals, time commitment, and risk tolerance. Short-term rentals offer higher income potential but require active management, frequent maintenance, and compliance with local regulations. They are best suited for properties in tourist-friendly locations where demand remains strong.

On the other hand, long-term rentals provide a more stable and passive income stream with fewer operational hassles. They require less day-to-day management and are ideal for landlords looking for consistent occupancy and predictable cash flow.

Ultimately, the right choice comes down to your investment strategy. If you prefer higher returns with more hands-on involvement, a short-term rental may be the best option. However, if you seek steady, long-term income with minimal effort, a traditional rental might be the smarter choice. Carefully evaluate market conditions, legal requirements, and personal commitment before making your decision.