Short Term vs Long Term Rentals in Atlanta: Which Is More Profitable?

Unsure whether to start a short-term or long-term rental property business? Regardless of whether you’re an investor looking to expand your portfolio or an owner thinking about getting into the rental market, choosing between a short-term vs long-term rental approach can feel overwhelming. However, one thing that you need to keep in mind is that there really isn’t a wrong choice between the two. And the answer mostly comes down to your strategy and goals. So, to help you with this, here’s a comparison between short term vs long term rentals in Atlanta, how these work, and what to expect.

Key Takeaways

• Short-term rentals may generate higher gross income, but long-term rentals often deliver more reliable and predictable cash flow.
• Atlanta’s regulations, such as licensing requirements, zoning rules, and other housing laws, can affect the operations and scalability of your rental property business.
• Whether you prioritize higher returns or consistent income, working with a property management company can help you optimize performance and reduce the burden of managing your rental.

Short-Term vs Long-Term Rental in Atlanta Profit Comparison

If you ask Atlanta property management companies to choose between short-term vs long-term rentals, it’s highly likely that you’ll have votes for either side. This is because short-term and long-term rentals aren’t exactly competitors, but more like two viable options that investors or rental owners can pursue. The question now is, how do you know which one works best for you?

First, let’s clarify what exactly we mean when we say short-term and long-term rentals. In Atlanta, short-term rentals refer to properties that are leased for a span of no longer than 30 consecutive days at a time. So, it can be rented out daily, weekly, or monthly. On the other hand, long-term leases are those leases for longer than six months, most commonly 12 months per contract. However, there are long-term lease agreements that last for more.

Now, one of the simplest ways to look at short term vs long term rental in Atlanta is by comparing profits. A quick look shows that the average rent for long-term rentals in Atlanta is around $1,629. On the other hand, short-term rentals have a $222 average nightly rate. Does this mean that short-term rentals are more profitable than long-term rental properties? Not entirely.

This is because there are other factors that come into play when we look at a rental income property’s real profits, such as demand, vacancies, and operating expenses. Here’s a quick summary of the general differences between short term vs long term rentals in Atlanta:

Short-term Rentals	Long-term Rentals
Higher potential income per night	More stable and predictable monthly income
Flexible pricing can be adjusted based on demand and seasonality	Lower turnover and vacancy
Increased vacancy gaps between bookings	Generally lower variable expenses compared to STRs
Higher operating costs for cleaning, utilities, furnishings, etc.	Tenants often cover utilities, depending on lease terms

 

Taking these into consideration, it’s important that you look past profit comparisons between short term rentals and long term rentals in Atlanta. Instead, conduct deeper research and analysis into the possible implications of running either a short-term or long-term rental property business.

Local Housing and Airbnb Regulations in Atlanta

Aside from profits, another factor that should come into play when choosing between short-term rental and long-term rental is the governing rules and regulations that will serve as the guideline and standard for your operations. This is particularly important when it comes to short-term rentals such as Airbnb, as they are highly regulated in Atlanta. Let’s take a closer look.

Atlanta implements a local ordinance that is meant to oversee the growing popularity of short-term rentals (STRs) in the city. Specifically, this regulation applies to short-term rentals that are meant to provide lodging for no more than 30 consecutive days at a time. But what does this entail exactly?

You must apply for and secure a short-term rental license before operating. This involves providing proof of ownership or authorized management and passing building and safety code inspections. Aside from this, there are zoning laws and regulations in Atlanta that may limit where and how you can operate a short-term rental business.

Many short-term rental operators in Atlanta are required to register properties as a primary residence, which means they are subject to local permitting rules and limitations. They may also be subject to additional tax obligations, including hotel-motel taxes and state and local sales taxes.

But what about long-term rentals? Given that Georgia is among the landlord-friendly states in the country, long-term rentals generally face fewer restrictions. However, there are still key landlord-tenant laws in Georgia that you need to keep close attention to, such as rent increase rules, occupancy limitations, and security deposit guidelines. More importantly, regardless of whether you plan for an STR or a long-term rental, compliance with Fair Housing regulations and habitability requirements is a must.

Management Differences Between Short-Term vs Long-Term Rentals in Atlanta

At this point, we’ve covered the difference between short-term vs long-term rentals in Atlanta in terms of profit, management styles, and requirements. However, there is another angle you should consider. In order to successfully establish your footing in the rental market, you need to understand how short-term and long-term rentals work. In particular, what do these demand from you in order to run smoothly, effectively, and efficiently?

In short-term rentals, here’s what you can expect. First, STRs typically demand more attention as they encounter more frequent guest communications. With every other renter you get on a daily, weekly, or monthly basis, you repeat the process of introducing them to the property, explaining specific rules and policies, and more.

The same goes when it comes to turnovers. Basically, every time a renter checks out of your short-term rental, you need to make sure that the property is cleaned and maintained for the next renter. Doing this daily, weekly, or monthly can be a tedious process.

Now, unlike STRs, long-term rental properties are more demanding upfront – from marketing, conducting open housing, screening tenants, and negotiating terms of the lease agreement. However, once you’ve secured a tenant, your responsibilities shift to mostly rent collection and periodic repair and maintenance requests.

Which Strategy Fits Your Goals? Bay Property Management Group Says…

Making a choice between short term vs long term rentals in Atlanta is not as simple as you think. While there is a lot to consider (profits, laws, and management styles), a huge part of this decision depends on your rental property business goals. So, here’s a quick summary.

Short-term rentals may offer higher income potential depending on occupancy, pricing strategy, and expenses. With the average nightly rate reaching a couple of hundred dollars, there is great potential to profit quickly from STRs. Not to mention that Atlanta is in high demand from visitors and short-term guests. STRs are also ideal if you don’t mind the licensing requirement and the more demanding management, whether you do it yourself or hire someone to do so (adding to your expenses).

On the other hand, long-term rentals align best with long-term strategies that emphasize stable and predictable cash flow. Moreover, it is ideal for a less hands-on approach, making it a good opportunity to expand your rental portfolio.

Given the overall complexity of running a rental property business, working with a property management company, like Bay Property Management Group, might be the solution you’re searching for. We offer an array of management services, from market analysis to tenant screening and property maintenance, designed to protect and optimize rental property businesses. Sounds interesting? Contact us today to learn more!