The management between Short Rentals and Medium Long Rentals

In the "category" of short-term rentals it is now a consolidated habit to distinguish shorter stays from those longer than 30 days.

Among those lasting less than 30 days, there are also very short stays, even lasting 1 day.

Regardless of the type of contract adopted, these are two different business models aimed at different customer segments but managers can use both, for example to compensate for the strong seasonality in some destinations or to respond to changes in the market or in demand.

The duration of the lease affects:

• selling price
• management costs
• construction of the property
• business organization
• contracts
• taxation

The shorter the lease term, the higher the chances of having a higher overall yield, especially if management is supported by professionals specialized in marketing and revenue management aspects, as typically happens in more structured companies.

Il average daily price in fact it is usually higher than that of longer rentals but you have to deal with the i variable costs and calibrate yours accordingly organizational structure adapting it to different needs.

Organizational flexibility and a broad and diversified portfolio are central elements for effective management of all the variables involved and not nullify the advantage of the higher average daily price that characterizes shorter stays.

Although we are still dealing with short-term rentals, we are talking about different businesses with customer segments that also have different needs in terms of spaces and their layout.

From the first assessment of the profitability prospects of each property, it is advisable to foresee an "alternative" use of the same, with reference to all the specific customer targets so as to better identify the use of the spaces which would otherwise have to be rethought and re-adapted during construction. 

Great attention must be paid above all to the contractual and consequently fiscal aspects whether you manage CAV or apartments with tourist lease agreements.

When it comes to "short-term rentals" the concepts of "short-term" or "tourist" are often used synonymously.  In both cases we refer to lease contracts for residential use but identified in different contexts and for different purposes.

Short-term leases were thus defined with Legislative Decree 50/2017 for tax purposes only indicated in the art. 4, which governs the option of the preferential regime of the dry coupon at 21%. The short-term lease, as introduced by Legislative Decree 50/2017 is therefore a lease that has duration as its main requirement, which must not exceed thirty days (even if not consecutive if with the same tenant), beyond which the obligation to register the contract is triggered (the option of the preferential dry coupon regime always remaining available).

The lease for tourist purposes (so-called tourist lease) instead was enucleated in the Law n. 431 of 1998 which separated among the lease contracts for residential use, effectively excluding them from the application of the discipline reserved to it, the lodgings rented exclusively for tourist purposes.

The contracts that concluded with this motivation (tourist purpose) leave complete freedom to the parties to determine prices and duration, unlike other types of lease, such as contracts for transitory use or so-called. “4 plus 4”.

Therefore, for contracts with a duration of more than 30 days, we can continue to talk about tourist leasing but the registration of the contract is introduced and the tax system changes. 

Alternatively, other types of contracts can be used, i temporary use contracts, for example, including those for students.

The transitional lease contract is stipulated for a duration of not less than one month and not more than 18 months. The transitory clause must be proven with specific documentation to be attached to the contract.

The transitional contract for students, on the other hand, provides for a duration of between 6 and 36 months and can be signed by both individual students and groups of university students away from home or by companies for the right to study. It can only be stipulated in the Municipalities where universities or branch universities are located.

If you manage CAV or B&BFinally, since these are accommodation facilities regulated differently at the regional level, extreme caution must be exercised in evaluating the regulations, to consult regional laws and regulations, and pay attention to tax implications with particular regard to changes related to exceeding the 30-day duration of the contract.

The regulatory complexity should not be underestimated, every mistake can also have criminal implications that cannot be overlooked.

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