For Apartment and Property Owners: The PROS and CONS of Short-Term Rentals
Short-term rentals have long stopped being something exotic. Today, they are one of the most discussed ways to use residential real estate — especially in resort cities and tourist regions. At the same time, there are still too many illusions, fears, and myths surrounding them. Some see them as a “gold mine,” others as an endless headache. As usual, the truth lies somewhere in between.
Let’s take an honest look at what short-term rental really is, who it suits, where its strengths lie — and where the hidden risks are.
What Short-Term Rental Really Is — Without the Romance
Short-term rental is a business model, not a “temporary way to rent out a property.”
It includes:
If we simplify it to one sentence:
Short-term rental is a mini-hotel in the format of a single apartment.
And that is exactly where its greatest advantage — and its greatest risk — lies.
Short-term rentals have long stopped being something exotic. Today, they are one of the most discussed ways to use residential real estate — especially in resort cities and tourist regions. At the same time, there are still too many illusions, fears, and myths surrounding them. Some see them as a “gold mine,” others as an endless headache. As usual, the truth lies somewhere in between.
Let’s take an honest look at what short-term rental really is, who it suits, where its strengths lie — and where the hidden risks are.
What Short-Term Rental Really Is — Without the Romance
Short-term rental is a business model, not a “temporary way to rent out a property.”
It includes:
- daily price management
- constant guest communication
- regular cleaning
- review management
- property condition control
- demand and seasonality analytics
If we simplify it to one sentence:
Short-term rental is a mini-hotel in the format of a single apartment.
And that is exactly where its greatest advantage — and its greatest risk — lies.
For Apartment and Property Owners: The PROS and CONS of Short-Term Rentals
Short-term rentals have long stopped being something exotic. Today, they are one of the most discussed ways to use residential real estate — especially in resort cities and tourist regions. At the same time, there are still too many illusions, fears, and myths surrounding them. Some see them as a “gold mine,” others as an endless headache. As usual, the truth lies somewhere in between.
Let’s take an honest look at what short-term rental really is, who it suits, where its strengths lie — and where the hidden risks are.
What Short-Term Rental Really Is — Without the Romance
Short-term rental is a business model, not a “temporary way to rent out a property.”
It includes:
If we simplify it to one sentence:
Short-term rental is a mini-hotel in the format of a single apartment.
And that is exactly where its greatest advantage — and its greatest risk — lies.
Short-term rentals have long stopped being something exotic. Today, they are one of the most discussed ways to use residential real estate — especially in resort cities and tourist regions. At the same time, there are still too many illusions, fears, and myths surrounding them. Some see them as a “gold mine,” others as an endless headache. As usual, the truth lies somewhere in between.
Let’s take an honest look at what short-term rental really is, who it suits, where its strengths lie — and where the hidden risks are.
What Short-Term Rental Really Is — Without the Romance
Short-term rental is a business model, not a “temporary way to rent out a property.”
It includes:
- daily price management
- constant guest communication
- regular cleaning
- review management
- property condition control
- demand and seasonality analytics
If we simplify it to one sentence:
Short-term rental is a mini-hotel in the format of a single apartment.
And that is exactly where its greatest advantage — and its greatest risk — lies.
Myths About Short-Term Rentals
❌ Myth 1: “Short-Term Rental Is Easy Money”
No.
It is:
There is no more “easy money” here than in a restaurant or hotel business.
❌ Myth 2: “I Can Just Rent It Out Myself and Earn More”
Theoretically — yes.
In practice — almost never.
Self-managing usually ends with:
Owners rarely calculate the cost of their own time. And that is the most expensive resource of all.
❌ Myth 3: “Management Companies Just Take a Percentage for Nothing”
This myth appears where the economics are not explained.
Let’s break it down honestly.
Why Self-Management Is Inefficient
Short-term rental requires:
And all of that — without weekends or vacations.
This is where a logical question arises: isn’t it actually cheaper to delegate this to professionals?
What a Management Company Actually Takes On
One of the biggest mistakes owners make is underestimating the real volume of daily work performed by a professional management company.
Under professional short-term rental management, the company handles the entire operational and commercial side, including:
In essence, the management company operates the property as a business — not as “an apartment occasionally rented out.”
What Remains for the Owner in Practice
In a properly structured model, the owner’s involvement is minimal.
In practice, the owner simply:
That’s it.
No:
Short-term rental stops being a nervous process and becomes a managed financial flow.
How Management Companies Actually Work
In international short-term rental practice, management companies typically work for 25–30% of net rental revenue.
It is important to understand what “net rental revenue” actually means.
What “Net Rental Revenue” Is — and What It Is NOT
Net rental revenue = guest accommodation income minus OTA commission.
❌ It does not mean:
This is an industry standard — not a trick.
Why Operating Costs Remain the Owner’s Responsibility
1. These Are Asset Costs, Not Management Costs
Utilities, cleaning, and consumables:
The management company generates income — it does not generate consumption.
2. Transparency and No Conflict of Interest
If commission were calculated “after all expenses”:
That is why mature markets have abandoned that model.
3. Business Control
A management company:
Taking a percentage of something you do not control is a flawed model.
A Real-Life Example (Bar, Montenegro)
Monthly revenue: €2,000
Booking commission (15%): – €300
Net rental revenue: €1,700
Management company commission (30%): – €510
Owner receives: €1,190
After that, the owner pays:
And receives a clear, transparent result — without manipulation.
Conclusion: Who Short-Term Rental Is Suitable For
Short-term rental suits those who:
The Main Takeaway
Short-term rental is not something to “try.”
It is a full-fledged business.
And like any business, it is either:
So the real question is not whether to hand the apartment over to a management company.
The real question is:
Do you want to run this business yourself — or is it wiser to delegate it to those who live in it every day?
❌ Myth 1: “Short-Term Rental Is Easy Money”
No.
It is:
- daily operational work
- constant small decision-making
- dependence on reviews and ratings
There is no more “easy money” here than in a restaurant or hotel business.
❌ Myth 2: “I Can Just Rent It Out Myself and Earn More”
Theoretically — yes.
In practice — almost never.
Self-managing usually ends with:
- burnout
- pricing chaos
- missed inquiries
- poor reviews
- low occupancy
Owners rarely calculate the cost of their own time. And that is the most expensive resource of all.
❌ Myth 3: “Management Companies Just Take a Percentage for Nothing”
This myth appears where the economics are not explained.
Let’s break it down honestly.
Why Self-Management Is Inefficient
Short-term rental requires:
- 7-day availability
- working with OTAs (Booking, Airbnb, etc.)
- understanding platform algorithms
- dynamic pricing
- conflict resolution with guests
- At some point, the owner becomes:
- a front desk manager
- a revenue manager
- a cleaner
- a customer support agent
And all of that — without weekends or vacations.
This is where a logical question arises: isn’t it actually cheaper to delegate this to professionals?
What a Management Company Actually Takes On
One of the biggest mistakes owners make is underestimating the real volume of daily work performed by a professional management company.
Under professional short-term rental management, the company handles the entire operational and commercial side, including:
- listing and managing the property on OTA platforms (Booking, Airbnb, etc.)
- dynamic pricing and seasonality management
- handling inquiries and bookings
- guest communication before, during, and after the stay
- organizing and supervising cleaning
- monitoring property condition and consumables
- overseeing minor repairs
- managing reviews and ratings
- resolving conflicts
- analyzing occupancy and revenue
In essence, the management company operates the property as a business — not as “an apartment occasionally rented out.”
What Remains for the Owner in Practice
In a properly structured model, the owner’s involvement is minimal.
In practice, the owner simply:
- receives a monthly report
- receives payments
- optionally monitors performance in real time
That’s it.
No:
- late-night guest messages
- urgent “where do we find a cleaner?” issues
- manual booking control and overbooking risks
- stress about reviews
Short-term rental stops being a nervous process and becomes a managed financial flow.
How Management Companies Actually Work
In international short-term rental practice, management companies typically work for 25–30% of net rental revenue.
It is important to understand what “net rental revenue” actually means.
What “Net Rental Revenue” Is — and What It Is NOT
Net rental revenue = guest accommodation income minus OTA commission.
❌ It does not mean:
- minus cleaning
- minus utilities
- minus consumables
- minus repairs
This is an industry standard — not a trick.
Why Operating Costs Remain the Owner’s Responsibility
1. These Are Asset Costs, Not Management Costs
Utilities, cleaning, and consumables:
- exist regardless of who manages the property
- are paid even in self-management
- are part of owning real estate
The management company generates income — it does not generate consumption.
2. Transparency and No Conflict of Interest
If commission were calculated “after all expenses”:
- disputes begin
- transparency disappears
- mistrust appears
That is why mature markets have abandoned that model.
3. Business Control
A management company:
- does not control electricity tariffs
- does not influence laundry prices
- does not manage inflation
Taking a percentage of something you do not control is a flawed model.
A Real-Life Example (Bar, Montenegro)
Monthly revenue: €2,000
Booking commission (15%): – €300
Net rental revenue: €1,700
Management company commission (30%): – €510
Owner receives: €1,190
After that, the owner pays:
- cleaning
- utilities
- consumables
And receives a clear, transparent result — without manipulation.
Conclusion: Who Short-Term Rental Is Suitable For
Short-term rental suits those who:
- analyze income annually, not emotionally
- are ready to calculate real economics
- understand the value of professional management
- want to preserve their asset and maximize its potential
- It does not suit those who:
- evaluate the business by the cost of one cleaning
- expect instant profit
- are not ready for systematic work
The Main Takeaway
Short-term rental is not something to “try.”
It is a full-fledged business.
And like any business, it is either:
- professionally structured
- or it consumes time, nerves, and money
So the real question is not whether to hand the apartment over to a management company.
The real question is:
Do you want to run this business yourself — or is it wiser to delegate it to those who live in it every day?