Short-Term vs Long-Term Rental Comparison
Short-Term Rental (Airbnb, Booking.com)
| Pros | Cons |
|---|---|
| Higher daily rates (2-3x long-term) | Higher vacancy risk |
| Flexible personal use | More management work |
| Better property maintenance | Platform fees (3%-15%) |
| Can adjust pricing dynamically | Cleaning costs between guests |
| Tourist hotspots = high demand | Regulatory restrictions in some cities |
Typical Returns: 6%-10% annual yield in good locations
Long-Term Rental (12-month leases)
| Pros | Cons |
|---|---|
| Stable, predictable income | Lower monthly rates |
| Less management effort | Tenant risks (damage, non-payment) |
| No vacancy between guests | Less flexible for personal use |
| Lower turnover costs | Rent control in some areas |
| Fewer regulations | Slower rent increases |
Typical Returns: 4%-6% annual yield
Breakeven Analysis
Example: ¥1M Property
- Short-term: ¥800/night × 150 nights = ¥120K/year (after 30% vacancy)
- Long-term: ¥6K/month × 12 = ¥72K/year
- Difference: ¥48K/year more for short-term
But short-term has extra costs: cleaning (¥20K), management (¥18K), platform fees (¥12K) = ¥50K
Net advantage: Short-term still wins by ¥46K/year IF well-managed
Hybrid Strategy (Recommended)
Best of both worlds:
- Peak season (4-6 months): Short-term rental at premium rates
- Off-season (6-8 months): Long-term rental for stable income
- Personal use: Block 2-4 weeks for yourself
Result: 7%-8% yield with reduced risk and personal flexibility
When to Choose Each
Choose Short-Term If:
- ✅ Property is in tourist destination
- ✅ You want personal use flexibility
- ✅ You can handle active management (or hire manager)
- ✅ Local regulations allow it
Choose Long-Term If:
- ✅ Property is in residential area
- ✅ You prefer passive income
- ✅ City restricts short-term rentals
- ✅ You don’t need personal use
Recommendation: Start with hybrid strategy to test your market, then optimize based on actual performance.