Long-term Rental in Amed – How to Rent Your Property in Amed
- Daniel Hemingway
Finding the right rental strategy for your passive income needs is key to maximizing the potential of your property. A long-term rental in Amed can relieve you of the daily tasks involved in running your holiday rental business.
This article will focus on the Pros and Cons of both short and long-term rental strategy for Amed’s thriving rental market. The information will help you to decide on what rental strategy is most suited to your individual lifestyle needs.
Table of Contents
Short or long-term rentals in Amed
With the popularity of short-term booking platforms like Airbnb, it is easy to forget the benefits of advertising your property as a long-term rental in Amed.
Weighing up the Pros and Cons of renting your property over the long-term will help you decide on the best strategy for your needs.
Profit from Amed's rental market
Buying a rental property in Amed gives you many options to generate passive income in line with your income needs. Targeting the holiday rental market in Amed by listing your property on short-term booking platforms like Airbnb can be financially rewarding.
However, short-term rentals can be difficult to manage, especially if you live outside of Bali. Managing bookings and welcoming guests to a clean home is essential to running your rental business. These areas of your rental operation will have an impact on your bottom line.
If you want to make the most of your rental business in Amed, this article explains what you need to do to capitalize on the full potential of your rental property.
Long-term rental in Amed: Pros and Cons
Using your property as a long-term rental in Amed can relive you of many hassles involved in running a short-term rental business. On the downside, a long-term rental property will generate lower levels of income. On the flip side, long-term rental properties provide a steady stream of income as they are less affected by seasonality.
The chart below shows the prices of five rental properties in Bali.
- 1-6 days – Price per day @ 75% occupancy per year
- 7-21 days – Price per day @ 75% occupancy per year
- 1 Month – Monthly rate @ 75% occupancy per year
- 1 Year – Annual rental rate @ 100% occupancy per year
The data clearly shows how the rental costs decrease as the rental period increases.
Using the data from the chart above, the following shows the difference in percentage terms between short-term (1-6 days @ 75% occupancy per year) and long-term rentals in Amed (12 months @ 100% per year);
- Villa #1 – Short-term rentals potentially generate 67% more revenue than long-term rentals.
- Villa #2 – Short-term rentals potentially generate 51% more revenue than long-term rentals.
- Villa #3 – Short-term rentals potentially generate 40% more revenue than long-term rentals.
- Villa #4 – Short-term rentals potentially generate 53% more revenue than long-term rentals.
- Villa #5 – Short-term rentals potentially generate 43% more revenue than long-term rentals.
Pros of long-term rentals
Peace of mind – Remove the hassle of marketing, guest communications, and guest turnover involved in managing short-term rentals.
Guaranteed income – Enjoy the benefits of a guaranteed passive income knowing that tenants are contractually set to stay in your property for an extended period. This way you are not affected by seasonal demand and you will know exactly where you are with your income finances.
Quality tenants – People like to live in nice places with nice surroundings. Signing a long-term rental in Amed can mean that tenants are more likely to take better care of your property over guests renting for a weekend.
Cons of long-term rentals
Profit – Generally, the longer the term, the less profit you will make. From the chart above, you can see that short-term rentals have the potential to generate more revenue over 12 months.
Locked in – Being locked in to a 1 Year contract limits your potential use of the property for holiday or residential purposes.
Control – With a long-term rental tenant you have limited access to check on the condition of your property. Your rental contract with the tenant can dictate terms and maintenance responsibilities, but you won’t know if these have been honored until the tenant is ready to vacate the property.
Short-term rental in Amed: Pros and Cons
With an ever-increasing tourist industry, property owners in Amed are enjoying the benefits of regular rental bookings and rising prices per day.
The chart below shows the average Length of Stay for guests renting a short-term property in Amed over the past 2 years.
The data indicates that short-term bookings range between 2.4 and 3.4 days per booking. The frequency of turnover is great for generating high levels of rental income. However, the downside to high guest turnover demands the operational efficiency of a professional property management team.
Pros of short-term rentals
Profit – Short-term rentals generate more income. The shorter the renting period the higher the price per day cost. Platforms like Airbnb have provided easy access for property owners to connect with guests looking for short-term holiday accommodation.
Flexibility – You may wish to use your property as a second home or for holiday accommodation. Short-term rentals allow you to reserve your own dates and use the property at your leisure.
Cons of short-term rentals
On-call 24/7 – Dealing with guests before, during, and after their stay in your rental property can be demanding. The quality and speed of your guest services will be judged by guest reviews. Positive reviews help you to generate future bookings, whilst negative reviews can turn potential guests off.
Guest turnover – Frequent turnover of guests is difficult to manage. As one guest checks out you need to prepare your property in time for the next guest to check in. Cleaning your property and changing bedsheets takes a lot of time. You must prepare your property in perfect condition before new guests arrive to leave a positive first impression.
Guest references – Trusting strangers to take good care of your property is difficult for short-term listings. With a long-term rental in Amed, reference checks can give you important details on the tenants so you can decide if they are more likely to care for your property.
Marketing – Promoting your short-term retinal property in a competitive environment requires constant effort. Posting images and advertisements across social media platforms and working on complex SEO Google rankings takes a lot of time, money, and technical know-how.
Reservations – Using technology to promote your rental listing and to manage a calendar of reservations is both expensive and time-consuming. The last thing you want is to double book your property so an organized reservation system is essential.
Legal issues – Obtaining the right permits to rent out your property in Amed is essential to avoid action from the government. Adhering to legal compliance and paying all the necessary taxes can be a headache as you try to understand how the system in Bali works.
Summary
Working out the best way to maximize the profit potential of your rental property in Amed is to define a rental duration strategy. The strategy should meet your income needs and provide the lifestyle benefits you are looking for.
If you are looking to buy an investment villa as a way to improve your lifestlye, then perhaps the income from a long-term rental in Amed can give you the freedom to go about your daily routine.
Short-term rentals can deliver a much higher rate of profit, however they demand much more of your time and effort.
Using a professional rental management company to handle the day-to-day operations of your short-term rental property in Amed can help you maximize the financial potential of your property.
Everything from marketing, reservations, client turnover, and accounting can relieve you of the tasks involved in running an efficient rental business in Amed.
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