SHORT TERM RENTAL AGREEMENTS IN EGYPT - PROS AND CONS
Renting an Apartment|3.4 MIN READ|Updated on: 22 October 2023|Written by: Mohamed Hassan
WHAT IS A SHORT-TERM RENTAL AGREEMENT?
It is well known that not all landlords and tenants always sign a rental agreement for longer than one year. Sometimes they can mutually agree to sign a short term rental agreement in the case that it can benefit both parties.
Property owners generally prefer a long-term rental agreement due to the fact that they can be rest assured that they won't spend any further money on their property. The concern that bothers most landlords is when the property will be vacant soon which can lead to potential losses of monthly revenue which might take some time to find another suitable tenant.
A short term rental agreement is based on a rental contract that does not exceed the 6-month period. The standard short-term rental agreement that you can find is between the ranges of three months and possibly month by month.
You will find short-term rental agreements among the communities where the property isn't highly demanded, in this case, the landlord would not intervene with short-term profit but when it comes to most luxurious homes in Egypt, you will notice that most of the landlords of these properties would not take into consideration any rental agreement less than one year.
In Cairo, the capital city of Egypt, it is highly not recommended to rent short-term rentals to anyone outside the vacation homes that can be taken highly into consideration.
PROS OF RENTING A SHORT-TERM RENTAL AGREEMENT AS A TENANT:
Some people consider renting short-term for the ability to be flexible and not locked into a written agreement where there can be penalties and further payments to be made.
If you are only contracted for 6 months and will possibly return to your country with no guarantees that you will continue your rental duration of longer than 6 months, it would be best to find a suitable home for yourself that provides a landlord that can welcome you with a short term agreement.
If you are newlywed and you need a short period of time to adjust to your own place with the ability not to be stressed about the due dates of receiving your own property, having a short-term duration would be best for you.
People who are based outside of the country of Egypt would like to ensure that they are in the best suitable location possible and that will not be known by not experiencing the neighborhood and environment yourself.
After a long-term duration, in most cases, it can turn into a month-to-month basis by the tenant and the property owner if their first term was a flexible relationship.
The property comes fully furnished with all the functioning appliances, which sometimes can save certain
CONS OF RENTING A SHORT-TERM RENTAL AGREEMENT AS A TENANT:
The landlord can increase the rental value of the property due to the duration of the rental agreement. If the property owner is asking for a certain amount for a longer duration, it is to secure his/her own future endeavors. In this case, the landlord will raise the rental value and claim it would be for repairs or damages that the rental cost will probably not cover.
After a long-term duration, however, when your rental agreement has expired, if you are residing in a property where there is no actual legal paperwork involved, it can put both parties at risk due to tax payments on behalf of the landlord.
However, you should want to also focus on the Landlord’s behalf and their perspective because there are other aspects you should want to consider. Any landlord’s worst nightmare is the consideration of the time that is spent between tenant to tenant. Once a tenant is serious and makes their first payments, the landlord usually tends to forget the process and does not seem to care much as long as the money rolls but it is definitely a different procedure when you must go through this process every 6 months as a short term rental agreement.
Another perspective that any landlord should consider is having neighbors if your property is not completely private. When you are constantly renting to new tenants as a short-term lease, sometimes, the neighbors will not be very pleased having to keep a positive relationship for their own benefit.
As a landlord, you can always befriend the neighbors in the building, having a friendly relationship with the neighbors can guarantee that the neighbors will be helpful to your new tenant as well as keep an eye on your tenant in case they are doing something harmful or not acceptable towards your property.
One thing is certain about short-term leases, is that it is not for weak-minded people from both sides regarding the tenants and the landlords. As a landlord, it is quite risky but if accomplished during the right time of year, you can always have this risk pay off big time.
Listing your premise on a short-term renting website can potentially increase your monthly income more than you can imagine. For websites that rent short-term rental agreements such as AirBnB, you can find the prices under the listing of properties that have rates per night that can usually add up to more than higher than the monthly income rate for a long-term contract but that is only if you put into consideration that the property will be occupied for that time.
You can search for a property online that is listed for $1,500 per month/long-term. You can find the same property under short-term rental agreements for $100 or even $150 per night! This means that the property owner can reach the amount of a long-term monthly rate by only renting the property for a quarter amount of the time.
PROS OF RENTING A SHORT-TERM RENTAL AGREEMENT AS A LANDLORD:
Maximize Your Short-Term Income to Long-Term Success.
Maintaining your property will be easier to fix on a short-term basis regarding certain aspects such as leaky faucets, stained carpets or even malfunctions and repairs to be made.
“Wear and Tear” can be at a minimum cost due to the tenants staying a short-term stay which can result that the property will not be fully occupied during the day and night as most people who are on vacation or on a short term visit are usually spending a lot less time indoors at home rather than the long term tenant that can be residing in the property most of the day/night.
CONS OF RENTING A SHORT TERM RENTAL AGREEMENT AS A LANDLORD:
Cleaning is a major factor. Renting short term means that you will be investing more time and work towards your premise. The property will require deep cleaning from each set of guests that come and go. This is something to highly consider if you are not located in the same city as the property, you might have to hire a trusted person to do that for you but it will also come at a cost.
Selecting a suitable tenant will no longer be a considerable option. For long term rental agreements, one of the major aspects that the landlord considers is the status and the actual tenant that they will welcome to their home for that limited period of time. When it comes to short term rentals, you do not have much of a choice other than asking for such required documents such as references, credit history or even employment status will no longer be a precaution that you must take. This on the other hand will not be very favorable as anyone can pay a certain price to reside in your property.
However, for this case, you can protect yourself by charging a higher security deposit than usual, which can be considered ordinary if the tenant is planning such events such as Christmas parties or family gatherings often.
THE SHORT TERM DECISION
The decision for a short term rental agreement totally depends on your living situation, standards and even needs. If you are traveling to a new country for an extended period of time or have a time gap between accommodations, renting a property for a short term can give you more flexibility, comfort rather than staying in a hotel that can be costly after each day.
Renting your own property rather than residing in a hotel for a couple of days also gives you the ability to cook your own meals and not having to depend on local restaurants or even the hotel to provide for you. It also gives you the capability to finish your own laundry without having to deal with a price tag every time.
However, if you are planning to travel for an extended period of time that is between six months and longer, it would obviously be preferred to commit to a long term rental agreement, which in the long run can save you some money that can be used in other aspects of your lifestyle.
Regardless of the circumstances, the decision to rent short term will be your own personal preference. While you might look at a short term lease as the best option for you at the moment, but in the future you might want to consider a long term lease with regards to your workplace and family. Having to understand the pros and cons of short term leases shall prepare you to make the best decision possible when you are ready.