By Shia Getter
I’m often asked, “Shia, your company manages many short-term rentals and long-term rentals. So, tell me, which generates more income, the short-term apartments or the long-term ones?”
Ultimately, long-term rentals bring in more money. However, the reason many people choose to let their apartments short-term rather than long-term is to have the apartment available for their own use when they visit. If income is the goal, however, choosing a long-term tenant is the right choice.
Short-term rentals also provide a nice income, even though the expenses are much more. Even if you use the apartment for yourself 40% of the year, you can end up making almost the same as renting long term. On the other hand, you don’t have a steady monthly income with short-term rentals. Sometimes, say with a luxury apartment, with a high price per night, you might have a higher income from renting short term. But keep in mind that the maintenance costs of a short-term apartment are higher, since the flow of tenants coming in and out increases the apartment’s wear and tear.
Just like a hotel room. When you rent an apartment, you must realize that everything in the dirah will be used by the tenants. You can’t really tell the tenants not to open “this cabinet” or “that cabinet,” but you can put a lock on a cabinet or closet. Otherwise, you can count on anything (do I need to be more specific?) in the apartment being used.
Always be available. You have to always be ready to meet prospective tenants and respond to all calls, because you will constantly be getting them–but this is the way the dirah stays occupied! (This is why The Getter Group employs receptionists to staff the phones from 8 a.m. until midnight.)
Get paid up front. It’s best to get the rental fee up front so that your tenant can enjoy Eretz Yisrael without you worrying about them being around to pay later. (You know how these things go when people are suddenly out of time and have a plane to catch . . .) Taking a deposit on a reservation is always a good idea so that you know the tenant will be there and the tenant knows he has the apartment.
In our experience over the last eight years, when someone pays up front, they enjoy their apartment more and feel they received fair value for their money. When people wait until afterward to pay, inevitably they find some reason to kvetch about something (“The neighbor’s phone rang at 4 a.m. and I woke up from the ringing!”) to get a discount–and are less likely to stay in your apartment during their next visit.
Emergency numbers list. Make sure the tenant has the numbers of people you trust in case there are any problems that must be dealt with, as well as technicians to call if needed. You have to develop a relationship with the technicians, and know that they are honest and reliable. They should know your particular apartment and be familiar with any quirks in security and other systems. Make sure the tenants have the contact address and know where the key is. Make sure they have an emergency phone number in case they get locked out.
Service is the key. Good service is key to a memorable stay! One tenant in an apartment we manage got locked in the bathroom at 2 a.m. Fortunately he had a cell phone with him. He reached out to us, and we were able to get a locksmith to come fairly quickly and rescue him.
Socks under the bed? Eretz Yisrael is dusty (especially when the renters are taking trips around the country during their visits). Before a new tenant arrives, make sure the apartment is cleaned well by a professional. It’s not just about the initial impression–if a renter finds a previous tenant’s socks under the bed, you have just made a “hotel stay” into a yeshiva dormitory environment. Don’t let the renter feel that way!
Give them a tour. Go through the apartment and show the new tenant where everything is: fuses, hot water, cold water, etc. Show them how to use the washing machine, air conditioner, etc. This way, they won’t “test” each button to try to figure it out, costing you time and money!
Have a backup plan. A “semi-professional” agency called our short-term rental department, hysterical. He had rented out an apartment short term for several days, ending on a Thursday. When the renter arrived, he told the agent that he had decided to rent it over Shabbos as well. However, the agent forgot to note this, and rented it out to someone else for Shabbos! It was an unpleasant scene when, on Thursday, the manager arrived to clean the dirah and found the renters still there, with no sign of being ready to move out. What was he to do now, with one apartment and two people expecting to have it for Shabbos? He had to find a solution, and fast.
Always make sure you have a backup plan in place for when an apartment unexpectedly cannot be rented for a period of time or a double booking is mistakenly made. Potential tenants prefer bigger agencies when renting cars, coach buses, or apartments since they know that if something goes wrong, the company is more likely to have some level of alternate arrangement more readily available. When people rent Egged buses, they often do so because they know that another bus is always a few minutes away in case of trouble. And that is certainly worth paying a small premium for!
Repeat business. People who rent short term in Israel usually are not people who come once in ten years to Israel. Often, they are visiting Israel at least once or twice a year. If they come to your apartment and are happy there, you will have repeat business again and again, as well as referrals, which can keep your apartment occupied for a fair part of each year, like clockwork. Small touches–like our welcome package, where we set out cookies, chocolates, and tissues and we put a bag of milk in the refrigerator before each tenant’s arrival–go such a long way to make them feel like this is the place they want to stay again and again. v
Shia Getter is the CEO of the Shia Getter Group, a full-range real estate services firm in Jerusalem catering to the Anglo investor. He is a noted expert, columnist, and author of Everything You Need to Know about Buying Real Estate in Israel. He and his professional team manage many upscale Jerusalem properties and have helped countless people buy, sell, and renovate property in Israel. Shia will be in New York and Los Angeles June 30—July 9 and has some availability for consulting with serious owners and potential investors who want to buy property in Eretz Yisrael while being properly advised. For more information and to schedule an appointment, call Sarah at 718-473-3950 or e-mail email@example.com.