Short-term vs long-term rental - which is more cost-effective?

If you are investing in rental housing, there are two rental models to choose from - tenancy short-termmainly aimed at tourists, and a stable long-term lease.

The choice is not easy, as each of these solutions has its strengths and weaknesses. The final decision should depend on your objectives, the amount of time you want to devote to handling the rental, and - crucially - the the location of your property. 

In this article we will compare the two models in a simple way. We will help you understand what the real profits and costs are, what risks are involved and how the potential of the Tri-City affects the profitability of each model. All so that you can make an informed choice about the best path for you and your investment.

Key differences between short-term and long-term tenancies

The main difference between the two models boils down to the duration of the contract, the nature of the tenant and how the flat is prepared. Rather than describe this in a long paragraph, let's look at a direct comparison that will best illustrate the key differences.

Feature	Short-term rental	Long-term rental
Duration of contract	Usually from a few days to a few weeks.	Minimum one year, often indefinitely.
Typical tenant	Tourists, people on a business trip.	Students, families, workers, people looking for a permanent place to live.
Flat furnishings	Fully furnished and equipped, ready to move in (appliances, dishes, bedding).	Can be partly furnished or empty; some tenants have their own furniture.
Flexibility for the owner	High - possibility to use the premises on your own between bookings.	Low - the property is occupied for the entire duration of the contract.

As you can see, these are two very different approaches to renting. Short-term rental is akin to running a hotel, while long-term rental is a more traditional and stable form of providing premises.

Potential profits and costs - which model generates more income?

At a glance, short-term rentals tempt with significantly higher daily rateswhich, in attractive locations in the Tricity, can generate higher monthly income than fixed rent. However, behind these figures are much higher and more varied operating costs.

The landlord has to pay for all utilities, internet, television and high booking portal commissions (often 15-20%). On top of this, there are fixed expenses for professional cleaning after each guest, washing of bed linen, replenishment of basic products (coffee, tea) and more frequent repairs due to intensive use.

In turn long-term rental is all about predictability and financial stability. Although the monthly rent is lower, landlord costs are minimised. Utility charges are usually passed on to the tenant, and the the risk of vacancy is significantly reduced, which guarantees a steady monthly income without the fluctuations associated with the tourist season.

Governance and risk - what is involved in each type of tenancy?

The level of commitment and the type of risk are other fundamental differences. Short-term rentals are virtually full-time workrequiring constant attention. A long-term lease, on the other hand, becomes almost maintenance-free once the right tenant has been found.

The table below shows the key aspects of governance and risk in both models.

Aspect	Short-term rental	Long-term rental
Time commitment	Very high: constant communication with guests, management of bookings, coordination of cleaning, rapid response to emergencies.	Low: intensive at the tenant search stage, then kept to a minimum.
Main risks	Lack of off-season bookings, negative guest reviews, damage due to high turnover of people.	Unfair or insolvent tenant, destruction of property, eviction problems.
Consumption of property	High and accelerated due to the large number of different visitors.	Standardconsistent with the normal use of the dwelling by permanent residents.

It is worth remembering that in both cases the risks can be minimised. There are professional rental management companiesthat can take on all the responsibilities - from visitor services in short-term rentals to tenant verification and rent payment guarantee in a long-term lease.

Tourist potential of the Tricity and the profitability of short- and long-term rentals

Location in the Tri-City is absolutely key and this often determines which rental model will be a hit. As one of the most popular tourist destinations in Poland, the Tricity creates phenomenal conditions for short-term rentals, especially during the summer season, holidays and long weekends. Flats located in coastal strip and in the vicinity of Gdansk or Sopot old town have great potential to generate high profits from overnight rentals.

At the same time, the Tricity is thriving academic and business centrewhich creates a huge and continued demand for long-term rental. Thousands of students, professionals and employees from various business sectors are looking for permanent housing, guaranteeing landlords a stable income throughout the year.

Therefore, the final strategy must take into account micro-location. A property in Przymorze or Oliwa, close to the university campus and office centres, will be ideal for stable long-term rental. On the other hand, a flat on Granary Island, in Jelitkowo or in the heart of Sopot, has considerable potential for short-term rental.

Short or long-term rental? How do you make a decision that fits your goals?

The final choice is an individual matter. You need to answer some questions about your expectations, lifestyle and willingness to take risks.

If your priority is maximising potential revenueyou are not afraid of greater personal commitment and accept the risks of seasonality - short-term rental can be for you. It also gives you a lot of flexibility, allowing you to use the flat for your own needs.

However, if you value above all else stability, predictable income and peace of mindand your time is limited, then by far the better choice would be long-term lease. This is a safer option that provides a steady profit with minimal effort on your part.

Before you make a final decision, it is worth consult the experts in our real estate offices. With our excellent knowledge of the local market, we will help you assess the real potential of your property and choose the strategy that will be most beneficial to you.

Your property, your strategy. How do you make the best decision?

As you can see, there is no single golden answer to the question of which rental is better. Choosing between short-term or long-term rental is a decision that depends entirely on your individual goals, capabilities and appetite for risk.

• Short-term rental is a path for those who place a premium on maximising potential profits and are ready to greater commitment and risks associated with seasonality. It is a dynamic model that offers great flexibility.
• Long-term rental is, on the other hand, an option for those who value above all stability, predictable income i peace of mind. This is a safer route that guarantees a steady income with minimal effort.

The key to success is informed decision based on sound analysis. Remember, however, that you do not have to undertake it alone. Professional assessment of your property's potential and support experienced real estate offices can prove invaluable in helping you avoid costly mistakes and get the most out of your investment.