Short-term vs. long-term rentals: Which is right for you?

Rental properties are one of the most reliable ways to turn real estate into steady income and long-term wealth — but which strategy actually fits your goals? 

Whether you’re a first-time investor or a business owner looking to diversify, leasing space gives you two big advantages: predictable cash flow today and equity growth over time. Here in southeast Louisiana and across the Gulf Coast, where tourism thrives and housing demand stays strong, rentals can be a powerful way to put your money to work.

From there, the next big question is: do you go the short-term route or stick with long-term tenants?

The answer depends on your goals, your lifestyle, and the level of involvement you want to have in your investment. Let’s break it down.

Short-term rentals: The flexible, high energy option

Short-term rentals are properties you list on booking platforms like Airbnb or VRBO, typically rented out for a few days to a few weeks at a time.

Why people love them:

• • Higher income potential per night. During peak seasons or big local events (think Mardi Gras or LSU football weekends), you can charge premium rates that far exceed traditional rent.
  • Flexibility. Unlike long-term leases, you can reserve dates for your own use. It’s perfect if you want a vacation spot that doubles as an investment.
  • Great fit for high-demand areas. Properties in tourist hubs, college towns, or along the beach often do well in the short-term rental market.

Things to consider:

• • High turnover means more work. Frequent cleaning, maintenance, and guest communication can quickly become a full-time job without a property manager.
  • Unpredictable income. Demand can dip during off-seasons or economic slowdowns, making it harder to rely on steady cash flow.
  • Local regulations. Many cities are tightening rules around short-term rentals, so you’ll want to do your homework before purchasing.
    
    

Long-term rentals: The steady, low-maintenance path

Long-term rentals are the classic approach, leasing your property to tenants for six months, a year, or even longer.

Why people love them:

• • Reliable income. Monthly rent payments provide predictable cash flow that makes it easier to budget and plan ahead.
  • Less turnover. Once you find the right tenant, you don’t have to worry about constant move-ins and move-outs.
  • Hands-off management. With fewer tenant changes, less frequent cleaning, and lower operating costs, long-term rentals often feel more manageable.

Potential drawbacks:

• • Lower monthly income compared to short-term rentals. You won’t have those big spikes during special events.
  • Less flexibility. Once a tenant is in place, you can’t use the property yourself without waiting for the lease to end.
  • Tenant risks. While rare with good screening, problem tenants can create headaches and affect your bottom line.
    
    

Choosing between the two: Which is right for you?

There’s no one-size-fits-all answer. It comes down to your goals, resources, and comfort level.

Ask yourself:

• • What do I value more, higher short-term returns or long-term stability?
  • How involved do I want to be in managing my property? Am I open to daily guest communication, or do I prefer a “set it and forget it” model?
  • What is my financial strategy? Am I focused on quick cash flow, long-term equity building, or a balance of both?
  • Where is the property located? A downtown condo might thrive as a short-term rental, while a suburban duplex may be better suited for long-term tenants.

For many investors, the right answer is actually a mix of both. Some build portfolios with a balance of short-term and long-term rentals to spread out risk and maximize opportunity.

No matter which path you choose, you don’t have to figure it out alone. At OnPath Credit Union, our commercial lending experts are here to guide you. We’ll take the time to understand your goals, walk you through your financing options, and help you make confident decisions about your investment property.

Whether you’re drawn to the fast-paced potential of short-term rentals or the steady reliability of long-term leases, we’ll work alongside you to finance your vision and set you up for success.

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