No aspect of real estate has become so rapidly digitized as rentals. Almost all landlord-resident interactions are now done online across digital marketplaces.
Variety is a well-known side effect of digitalization. Over the last decade, real estate technology has added an innovative touch to the rental market, which now allows homeowners multiple ways to rent out their living spaces. So, if you’re struggling to decide what rental channel is right for you – you’re not alone.
From long-term leases to short-term leases and vacation rentals, each comes with a separate price tag and individual management needs. Some landlords prefer long term rentals while others love Airbnb for vacation rentals. But there are other — oftentimes more lucrative — options that homeowners and real estate investors should further explore.
We’ve compiled and compared the most popular rental methods using their leading marketplaces.
What is PadSplit?
PadSplit is an Atlanta-based start-up that stepped onto the rental scene in 2017. Since then, we’ve become the country’s largest shared housing marketplace that’s specifically designed for the workforce. In many ways, we combine elements of both traditional and vacation rentals. Founder and CEO Atticus LeBlanc describes PadSplit “as a long-term affordable housing solution as compared to Airbnb, but much more flexible than traditional housing options so we can adapt to the needs of lower-income workers.”
PadSplit was the market’s answer to these ever-present issues by offering renters all of the Airbnb model’s convenient trappings with long-term prospects similar to traditional rental methods. Our platform offers a new wealth of technology features and tools that are advantageous to both landlords and renters alike.
Traditional Rentals
With rapidly emerging real estate rental marketplaces, homeowners and investors alike are most aware of the traditional rental method. Despite disruptions made in the marketplace, it can’t be denied that old-school rental methods still have a reliable place in real estate portfolios nation-wide.
A regularly touted advantage of traditional rentals is that they require less work. It’s more passive than Airbnb or VRBO without the daily or regular cleanings, welcoming guests, and so on. With traditional leases you also have fewer leases to deal with, more control of who lives on your property, and guaranteed monthly income.
Another benefit to traditional rentals is cutting out the digital marketplace middle-man. Naturally, renting traditionally involves a more one-on-one personal approach with residents or real estate agents.
What’s the Difference Between PadSplit and Traditional Rentals?
PadSplit combines traditional renting strategies with more modern concepts. Apart from offering the security of longer leases to both Hosts and Members, PadSplit is notably more “hands-on.” In fact, upon applying to list your property on PadSplit, we will walk you through how to optimize your property for co-living. By doing this, you may find that your space is more valuable than initially thought. We recommend converting underutilized space in your property to additional bedrooms to optimize your returns. As a result, PadSplit makes for a perfect co-living space marketplace.
In contrast to a traditional rental which rents the entire space under one lease, PadSplit employs the rent by room strategy. This makes it more affordable for any given renter because it is cheaper than renting an entire space. It also maximizes your profits. Owners who manage properties through PadSplit have seen their profits increase by more than 100% and experience lower turnover rates thanks to the pre-screened Member pool.
Choosing the right residents is another crucial component to any rental property. Screening is one area landlords take seriously — and with good reason. PadSplit screens all of their candidates, including background screenings (where available) and employment verification. This frees up more time for Hosts and removes them from the tedious components of the rental process.
In short, this new method of home rentals makes the process smooth, profitable and truly passive for landlords.
Airbnb and Short-Term Rentals
Airbnb changed the landscape of vacation rentals and disrupted the hotel industry when they arrived on the scene. For many users, it feels like a home away from home. Properties are decorated in inviting ways to entice people to stay longer and feel comfortable rather than in a sterile hotel environment.
As a guest, you can call upon your host for help and special requests if needed, another great benefit. On the hosting side, profits tend to be higher with short term rentals than traditional rentals. Add to this the seasonality of certain locations and prices may skyrocket at certain times of year.
That said, when you list your property with Airbnb, you take on the vast majority of responsibility for dealing with Members. You are in charge of managing your property cleanups, interacting with guests online or in person, and the fast turnover can lead to uncertainty if your listing doesn’t get booked.
What’s the Difference Between PadSplit and Airbnb?
Over the 9 years that Airbnb has been on the market, a demand for a more long-term alternative was growing. Landlords and renters alike were fond of Airbnb’s no-fuss, fast, and streamlined processes. The only issue was that long-term renting with Airbnb simply wasn’t affordable; plus, managing guests can be quite time consuming.
However, with the likes of PadSplit on the scene, this communication gap is currently being bridged. PadSplit acts as the middle-man to eliminate much of the hassle of managing residents. We also take control of Member management and will deal with any complaints or inquiries. That way, you can focus on growing your portfolio or your other responsibilities while generating passive income.
Which Renting Method is the Most Lucrative?
Truth be told – it’s hard to say. How much money you earn as a landlord depends mainly on your target Member, location, and the quality of your living space. Plus, the measure of financial success varies from method to method. For instance, if you list your property with Airbnb, how much money you make depends on your price and how many guests you can bring in.
When it comes to traditional methods, rent prices tend to fluctuate with market demands or the country’s economic state. Plus, income is more fixed than with other methods as you’ll receive rent payments every month for the duration of the tenure. It’s widely accepted that you’ll earn less using more traditional methods than with online marketplaces such as Airbnb or PadSplit.
Fortunately, there are many options to suit all needs. Overall, PadSplit, Airbnb, and traditional renting models cover the most ground. While Airbnb is suited for owners who don’t want to commit to anything long-term, traditional rentals provide long-term stability. With PadSplit, you have the opportunity to leverage the best elements of each of these options by maximizing profits and creating stability.
Want to dive deeper? Read our Host stories to learn more about PadSplit Hosts who have taken the jump from traditional or short-term rentals to the PadSplit model. You can also take advantage of our Earnings Calculator to see how much you earn using the PadSplit model compared to traditional rentals.
Our Sales team is happy to talk through your existing portfolio or next steps. Schedule a call with them today.
