Many real estate investors have been asking themselves the question: Are short-term rentals or long-term rentals likely to be more profitable?
The right investment type depends on several factors, including the market, the demand from tenants and guests, and your own investment goals.
In DeKalb County, Georgia, investors are considering their return on investment (ROI), cash flow, and long-term financial goals. This area is located just to the east of Atlanta, and it’s home to diverse neighborhoods, well-rated schools, and thriving commercial areas. Here, investors find a blend of urban, suburban, and residential areas, including popular cities like Decatur, Brookhaven, and Dunwoody. With its proximity to downtown Atlanta, excellent transportation links, and bright cultural scene, DeKalb County attracts new residents consistently. It also attracts a steady influx of visitors, which creates opportunities for both short-term and long-term rental properties.
Understanding the local market dynamics, including demand, regulations, and potential profitability of each type of rental, is essential for making an informed decision.
As property management experts in DeKalb County, we can help you determine which investment type is best for you. Here are some things to consider.
Short-Term Rentals: Flexibility with Potential for High Returns
Short-term rentals, commonly found through platforms like Airbnb or VRBO, are ideal for properties well-positioned for tourists, business travelers, or people temporarily relocating to the area. They typically involve renting out a property (or a part of it) for less than 30 days.
Why short-term rentals might be best for you:
- You’ll earn higher per-night rates. Short-term rental properties tend to generate higher rental rates per night than long-term rentals. Nightly rates can be profitable in areas that attract visitors and professionals from the Atlanta metropolitan area, especially if your property is well-located or unique.
- Flexibility in rental terms. As a short-term rental owner, you can adjust pricing and availability based on demand. This allows you to optimize your income based on seasonal trends, holidays, or special events in the area. It also allows you to use the property yourself if the need arises.
- Diversified income streams are possible. By listing your property on multiple platforms, you can create a diverse and stable source of rental income from different types of guests, whether they’re families in town for a weekend or a traveling nurse on a one-month assignment.
This doesn’t mean there aren’t challenges. Here are some of the things that make short-term rentals more difficult to manage:
- There are many regulations. DeKalb County and the City of Atlanta have implemented various regulations for short-term rentals, including licensing requirements, restrictions on the number of days a property can be rented out, and zoning laws that limit short-term rentals in certain residential areas. Navigating these regulations can be a hassle for new investors.
- Maintenance costs may be higher. Managing a short-term rental involves frequent turnovers, guest communication, cleaning, and maintenance. If you don’t hire a property management service, these tasks can waste your time and diminish your profits.
- This is a seasonal rental business, and short-term rentals can be more volatile. While this is a popular area for visitors, there may be months when your occupancy rates dip, leading to less consistent income.
Long-Term Rentals: Stability with Steady Cash Flow
Now let’s talk about long-term rentals. These involve leasing a property for a year or more, usually to tenants looking for a stable home. While monthly rental rates are typically lower than what you might earn on a short-term basis, long-term rentals offer different stability.
Here’s why we like them for investors:
- Consistent cash flow. One of the most significant advantages of long-term rentals is the predictability of income. With tenants typically signing a year-long lease, landlords can expect regular monthly payments without the fluctuations of short-term rentals. It’s easier to budget for the entire year ahead.
- More efficient management. Unlike short-term rentals, long-term rentals involve less frequent turnover and, therefore, fewer hands-on responsibilities like changing linen, scrubbing floors, mowing the lawn, and restocking coffee.
- Fewer vacancies. DeKalb County has a steady demand for rental properties. In contrast to short-term rentals, vacancies in long-term rentals tend to be shorter and less frequent, especially in highly desirable neighborhoods.
What might not work for you when renting out homes for the long term? Consider these challenges:
- Lower returns. While you’ll have consistent income, long-term rentals generally bring in less money per night, week, and even monthly than short-term rentals. Depending on the market, you may not be able to generate the same income level, especially in high-demand tourist areas.
- Less flexibility. Once a tenant is signed on for a long-term lease, adjusting prices or changing rental conditions is harder. If you need to make a change, you may have to wait until the lease is up, limiting your ability to take advantage of market shifts.
Which is More Profitable? Short-Term or Long-Term Rentals in DeKalb County?
The answer depends on your investment goals, willingness to furnish and attend to the property, and the specific area of DeKalb County you’re targeting.
Short-term rentals will likely be more profitable in areas with high tourist demand or near business hubs, like downtown Decatur or other major attractions.
Long-term rentals, on the other hand, offer more stability and less hands-on management. For those who want a predictable income stream without frequent turnovers, a long-term rental may be more appealing.
Ultimately, both short-term and long-term rentals have their place in DeKalb County’s real estate market. To determine which is more profitable, your investment goals and financial position will drive your decision.
We’d be happy to talk through your questions about specific neighborhoods, our property management services, and tips on maximizing profitability for your rental property investments in DeKalb County.
Please contact us at Silas Frazier Realty, LLC. We lease, manage, and maintain investment properties in Atlanta, Snellville, Stone Mountain, Lilburn, Conyers, Smyrna, Marietta, Lithonia, Jonesboro, McDonough, Vinings, Brookhaven, Tucker, and the surrounding areas.
