Long-Term or Short-Term: Buying a St. George Rental Property

St. George is a smart place to buy an investment property, but the success of it hangs on choosing the right format for your goals. Choosing between a short-term and long-term rental property in St. George depends on your financial goals, management preferences, and understanding of the local market.

STRs can offer higher income potential and the chance to enjoy your property as a vacation home, while LTRs provide stability and simplicity. Here are some factors to keep in mind as you look for St. George real estate opportunities. 

Short-Term Rentals in St. George

Short-term rentals, the ones you see listed on like Airbnb or VRBO, are properties rented out for a few days to several weeks at a time. In St. George, STRs appeal to tourists visiting the area's natural attractions, outdoor enthusiasts, and even snowbirds seeking mild winters. There can also be demand from people checking out the area as a potential new home, or parents of college students. We see steady demand throughout the year for short term rental properties. 

Advantages of Short Term Rentals in St. George

• Higher Income Potential: Short-term rentals often generate higher monthly revenue compared to long-term rentals, especially during peak tourist seasons.
• Flexibility: You can block off dates for personal use, making it possible to enjoy the property as a vacation home without carrying the cost of a vacation home that is exclusively for personal use.
• Tax Benefits: You may be able to deduct expenses like maintenance, utilities, and property management fees, though it's best to consult a tax professional.
• Appeal to Tourists: St. George's status as a vacation destination ensures steady demand, particularly if your property is near attractions like Zion National Park, Snow Canyon State Park, or golf courses. We can help you find a property in the right community to appeal to tourists.

Challenges of Short Term Rentals in St. George

• Regulations: St. George has specific zoning laws and licensing requirements for STRs. It's essential to research these before buying a property, including any relevant HOA restrictions.
• Management: Managing bookings, cleanings, and guest communications can be time-intensive, though hiring a property manager can certainly ease this burden. Just factor those costs into your budget.
• Seasonal Variability: Income may fluctuate depending on the time of year, with peaks during tourist seasons and lulls during off-peak times. St. George overall has a strong demand for STRs throughout the year, but there are usually going to be some slow periods with any short term rental property. 

Long-Term Rentals in St. George

Long-term rentals are properties leased for extended periods, typically six months to a year or more. St. George's growing population and expanding job market make LTRs a viable investment option. If you're drawn to the simplicity and lower time commitment, it may be worth the potentially lower income stream. 

Advantages of a Long-Term Rental in St. George

• Steady Income: Long-term leases provide a predictable, stable monthly income. While there is always the potential for a tenant to miss or be late on a payment, in general you can predict your income for the year or at least the term of the lease. 
• Lower Turnover Costs: With tenants staying for extended periods, you save on marketing and frequent cleaning or maintenance costs.
• Simpler Management: Once a tenant is in place, there’s less day-to-day involvement compared to short-term rentals. Even if you hire a property manager, the work (and fees) involved will be less than with a STR.
• High Demand: St. George's population growth and popularity with retirees and families ensure consistent demand for long-term housing.

Challenges of Long-Term Rentals

• Lower Income Potential: Monthly income may be lower than short-term rentals, particularly in a high-demand tourist areas of St. George.
• Tenant Risk: Problem tenants or vacancies can impact cash flow, though screening tenants carefully can mitigate this risk. Of course this risk is present with STRs, too, but the risk is increased with long-term tenants. 
• Limited Personal Use: Unlike STRs, you can’t use the property yourself when it's occupied by a long-term tenant.

By carefully weighing the pros and cons of each option and considering the unique characteristics of the St. George real estate market, you can make an informed decision that aligns with your investment goals.

Ready to buy a property in St. George? Contact us any time.