With the advance of the coronavirus and the sudden drop in tourism, many local accommodation owners saw all their reservations for their properties cancelled within a few days. If in times of crisis the solution is to reinvent, with LA this could not be different. With the borders closed, tourism was reduced and apartment owners and Airbnb management companies looked for new solutions.
Many gave up on tourism for conventional rental, some took advantage of this moment to upgrade their property and others chose to accept medium and long stays (from 3 to 6 months). Understanding that good, well-located, apartments will always have their public, even if the market takes a while to stabilise, before making any decision it is necessary to evaluate what options are the most worthwhile.
Still have doubts if conventional renting is the best option? We have written a text with some points. Check this link!
Since, from the perspective of many owners and businesses, the conventional rental market is unable to meet long-term financial expectations, it can be very advantageous to make the apartment profitable during this period. To host longer stays, many believe that they will lose their AL license. But know that this is not true! Your property can keep its license and still receive a direct long stay, i.e. not through Airbnb or Booking. Get to know some characteristics, advantages and disadvantages of this type of rental.
A stay of medium/long duration has almost the same characteristics as a conventional rental: it is advisable to ask for a deposit, it is usually not done through platforms such as Airbnb and Booking, bills can be included or charged separately – it varies according to the negotiation, and it is advisable to sign an agreement between both parties.
For the tenant, the property does not serve as an official fiscal address, since the apartment is under the AL regime. For the landlord, the charges are the same as for a tourist rental. Therefore, the agreement can be concluded for an indefinite period of time, not being necessarily shorter as many believe.
With the coronavirus and the exponential drop in tourism, opting for medium term rental can be an interesting way to make your local accommodation profitable. In addition, the wear and tear is reduced, since the attention of a tourist is usually different from that of a tenant. Apart from the fact that with a contract to be fulfilled, people have greater responsibility for the damage caused – should it happen. Moreover, it does not suffer the variations of the market and guarantees a fixed value during an uncertain period like this one we are living.
It is also relevant to take into account that if you opt for a conventional rental, any property will automatically terminate the local accommodation activity and lose its license. This will mean the loss of the entire local accommodation business, quite possibly forever if the property is in a historic centre that is already, or will be in the future, under restrictions on the issuing of new licences. Not to mention that the tax rate of an AL is much lower than that of a conventional rental, which can reach a tax rate of up to 28% on top of the annual revenue.For this reason, we stress that longer stays do not cause the apartment to lose its AL licence and make it possible to return to the tourism sector as soon as you wish.
With the house rented for a long time, the owner cannot enjoy the space and cannot do visits for control and maintenance. To have a tenant in a medium/long term reservation it is often necessary to adapt the house to the needs of a person with a long stay such as, for example, to include closets, domestic objects among others which can be a greater expense than what is normally associated with AL – in addition to the owner not being able to monitor the wear and tear regularly as it is possible to do between a guest entrance and exit. And just as it is advantageous to maintain a fixed income, this can become a disadvantage when the market reheats and tourism returns, since current prices are low and for short stays the gain is higher.
People have bought houses with high prices, bought furniture, invested in experiences, focused on a very profitable segment that is tourism. Many have positive comments on the platforms, which means, indirectly, a high monetary value because it brings recognition from the guests. Besides months and years of investment for a sector that is not finished.
So, before you choose how to make your property profitable, study the market and see the best option for you. And if you want help from a premium company specializing in local accommodation management, get to know LovelyStay’s services.
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