Scenario analysis
Short Term or Long Term? The Decision Rule
When does it make sense to move an apartment from a long-term let to short term?
Short-term rental produces a higher gross income than a long-term let; in exchange come vacancy risk, operational load and seasonal swings. Whether the difference covers that load has to be worked out property by property.
| Period | Typical occupancy | How pricing behaves |
|---|---|---|
| July – August (high season) | 85% | Rate and minimum stay both go up |
| April – May, September – October | 72% | Balanced rate, a clear weekday/weekend split |
| February (low season) | 48% | Long-stay incentives and discount rules |
Occupancy swings between 48% and 85% over the year. Deciding on the annual average hides what the low season does to cash flow. That is why we assess on the monthly distribution, not the annual average.
What this tells us
- The decision rule: unless short term's net return is at least 1.5× the long-term rent, the extra time and risk don't pay for themselves.
- If running it yourself takes 8–10 hours a week and occupancy sits below the area average, a management commission usually pays for itself.
- If active listings in an area are growing more than 30% a year while the average nightly rate isn't, that area is approaching saturation.
Source: PeraHomes guides — Is My Home Right for Airbnb? and Why You Need an Airbnb Management Company — read the guide. These figures are regional averages; an individual property can perform differently.
How does this arithmetic work out for your property?
Let's prepare an assessment for your property, using occupancy and rate data from your area.