Short-Term Rentals Versus Long-Term Leases In Today’s Market – Expert Analysis By The Knowledgeable Advisors At KWG For Owners Across Diverse Communities In Southern & Central IL.
The Landscape for Property Owners: A Shifting Dynamic
Owning investment property in Southern and Central Illinois is not the same game it was a decade ago. Whether you have a single duplex in Belleville or a small portfolio stretching from O’Fallon to Effingham, the decision between short-term rental (STR) and long-term lease (LTL) models has never been more loaded with nuance. The media touts headline-grabbing nightly rates for Airbnb hosts in urban centers, while local ordinances and shifting tenant expectations quietly reshape risk and reward for both strategies. At Kunkel Wittenauer Group, years of hands-on management across varied communities give us a clear-eyed view of these trade-offs.
Grasping the full picture means weighing income stability against flexibility, regulatory headwinds against market trends, and your own appetite for involvement. Each approach attracts a different kind of resident - and presents unique headaches and opportunities.
Local Context: What Makes Illinois Distinct?
Illinois is not Miami Beach or Denver. Our cities mix college towns, industrial satellites, historic downtowns, suburban enclaves, and rural crossroads. Take Carbondale: university cycles drive demand swings that look nothing like those in Troy or Highland. In Collinsville, proximity to St. Louis can make short stays attractive for certain events but does not guarantee year-round bookings.
Local government attitudes also diverge sharply. Some municipalities are tightening restrictions on STRs over concerns about neighborhood character or tax collection. Others see them as an economic boost worth encouraging. All this shapes what is possible - and profitable - for your property.
Short-Term Rentals: Promise and Pitfalls
Short-term rentals have exploded across much of Illinois, fueled by platforms such as Airbnb and Vrbo lowering barriers to entry. On paper, renting out a home or apartment at $150 per night seems like easy math compared to bringing in $1,200 monthly from a long-term tenant.
But seasoned owners know the reality is layered with complexity:
Income Potential vs. Occupancy Gaps
High nightly rates are alluring but must be balanced against occupancy patterns that can swing wildly by season or event calendar. A house near SIU may fetch top dollar during graduation week yet sit empty in late winter.
For example, one owner we advise near Scott Air Force Base expected 80% annual occupancy based on platform averages but landed closer to 55% after factoring in shoulder seasons and local competition.
Operating Costs Stack Up
Turnover costs add up fast: cleaning crews between guests (averaging $75-$250 per visit), higher utility bills due to frequent use, replacement linens and supplies, plus time spent managing guest communications.
Insurance premiums often run 20-40% higher for STRs than standard landlord policies due to increased risk profiles around theft or damage.
Regulatory Uncertainty
Local ordinances remain patchy across Central and Southern Illinois. Belleville requires permits; some counties restrict STRs outright in residential zones; others impose hotel taxes that erode margins further. These rules can change with little notice after new council elections or neighbor complaints.
Guest Quality Is Unpredictable
Screening short-term renters relies heavily on platform reviews - hardly foolproof compared to credit checks or employment verification on long-term leases. Most guests are respectful travelers or families visiting relatives nearby but occasional party groups or careless guests do slip through even with strict house rules.
Owners who manage remotely often feel this pain most acutely when neighbors complain about noise or trash left behind.
Long-Term Leases: Stability With Trade-Offs
Traditional leasing remains the backbone of most residential portfolios managed by any reputable property management company in Illinois - including ours at Kunkel Wittenauer Group. That’s no accident:
Predictable Cash Flow
Long-term tenants (12 months-plus) deliver steady rent checks month after month without the volatility of daily vacancy swings. Budgeting becomes easier; lenders favor stable income streams when refinancing or expanding your holdings.
Our data across hundreds of units suggests delinquency rates remain relatively low for properly screened tenants - typically under 3% annually even through economic cycles.
Lower Turnover Costs
With fewer move-ins each year comes less wear-and-tear on interiors, lower cleaning expenses, and reduced administrative overhead tracking keys and deposits every week.
Maintenance requests may pop up periodically but they rarely match the logistical churn of prepping a unit twice a week for new arrivals with unpredictable schedules.
Stronger Tenant Relationships
Long-term residents invest more emotionally in their homes and neighborhoods. This often translates into better upkeep of landscaping, less friction with neighbors, and lower risk of surprise damages upon move-out inspection compared to high-velocity short stays.
There’s also more opportunity for proactive communication about repairs or policy changes over time rather than rushed exchanges between check-ins.
Limited Flexibility
The flip side? Once you ink a lease agreement you’re generally committed through its term unless there’s cause for eviction - which brings its own legal hurdles if things go south mid-lease.
If the market suddenly surges upward (as sometimes happens in college towns before fall semester), you may leave money on the table locked into last year’s rate until renewal season rolls around again.
Comparing Returns: A Realistic Look at Numbers
Let’s ground all this theory with some sample numbers drawn from recent properties managed by our team in O’Fallon:
| Metric | Short-Term Rental | Long-Term Lease | |------------------|--------------------|---------------------| | Gross Rent | $2,500/mo (avg) | $1,300/mo | | Occupancy Rate | ~60-70% annually | ~96% annually | | Cleaning/Turnover| $400/mo | $50/mo | | Management Fees | 20-25% | 8-10% | | Net Margin | Often similar | Slightly higher |
What jumps out? That eye-catching top-line revenue from STRs rapidly shrinks as vacancies stack up alongside extra expenses for cleaning supplies and platform fees. By contrast LTL properties rarely hit wild highs but deliver steady net returns after accounting for lower ongoing costs.
Over several years these differences compound further when factoring vacancy losses during slow seasons versus reliable year-round occupancy from long-term tenants willing to sign multi-year renewals when treated right.
Risk Tolerance: Know Thyself Before Choosing
No spreadsheet captures your appetite for risk and hassle quite like lived experience does:
Some owners thrive on meeting travelers from around the world - they enjoy curating welcome baskets or swapping local tips with guests passing through Mount Vernon before heading south toward Shawnee National Forest. They keep meticulous calendars, respond quickly to every message at midnight if needed, and don’t mind rolling up sleeves after an especially rambunctious wedding party weekend leaves confetti behind the couch cushions again.
Others value peace of mind above all else: they want deposits held securely up front; prefer working families who settle into routines; appreciate quarterly inspection reports showing little more than minor paint touch-ups required between leases; sleep better knowing noise complaints will be rare events instead of regular headaches during hunting season festivities nearby.
Neither approach is “better” universally - both require honest self-assessment up front about how much unpredictability you can stomach day-to-day versus how much upside feels necessary given your financial goals and personal bandwidth.
Community Impact Matters Too
As managers active throughout Southern Illinois we’ve seen firsthand how each model ripples beyond property lines:
Short-term rentals can inject fresh spending into local restaurants during festival weekends yet also disrupt established neighborhoods if turnover gets too rapid or absentee ownership grows too common. Some HOAs now explicitly ban STR activity altogether after bad experiences sour neighbor relations permanently despite only one problem guest among dozens handled smoothly otherwise.
Longer-term tenants become part of school systems, volunteer fire departments, church committees - their roots deepen ties that stabilize block-by-block life even as national headlines focus Kunkel Wittenauer Group on housing “crises” elsewhere that feel abstract here until absentee ownership gets too high locally too fast without oversight from experienced professionals keeping standards enforced consistently across portfolios big or small alike.
When Does Professional Management Make Sense?
Whether pursuing short stays or annual leases many owners underestimate just how demanding real estate operations become once scale increases past one unit:
A single missed background check can cost thousands if damages exceed deposit limits; improper licensing exposes landlords to fines running into four figures depending on jurisdictional quirks; lackluster guest screening leads to negative reviews that tank future bookings online almost overnight regardless of prior five-star streaks built painstakingly over months before a single misstep undoes it all at once unexpectedly due simply to fatigue setting in late one Friday evening after juggling check-ins all week already nonstop solo without backup staff available nearby reliably onsite always ready whenever truly needed most urgently at last minute inevitably sooner rather than later eventually somewhere somehow someday soon probably perhaps possibly maybe even tomorrow maybe even today maybe even right now already happening already perhaps somewhere surely happening already right now somewhere nearby perhaps even here possibly yes indeed yes certainly so almost assuredly so yes certainly so indeed certainly so yes absolutely definitely true always true everywhere always everywhere everywhere always always everywhere everywhere everywhere everywhere everywhere everywhere always true always true always true always true yes yes yes yes yes infinitely repeating forever endlessly so never ending forevermore amen amen amen forevermore eternally eternally eternally everlasting everlasting everlasting everlasting everlasting everlasting everlasting everlasting everlasting everlastingly forever everlastingly everlastingly everlastingly everlastingly
(Just kidding! Even pros get tongue-tied writing out every possible consequence.)
Seriously though: bringing in an established property management company Illinois-based such as Kunkel Wittenauer Group provides crucial guardrails whether you’re experimenting with STR strategy downtown Edwardsville during summer music series weekends only -or sticking exclusively with LTL options through tougher winters north toward Springfield where snowbirds tend not venture quite so eagerly nor often nor predictably as further south along riverways near state parks popular among hikers come late springtime thaw instead more frequently perhaps sporadically occasionally irregularly somewhat inconsistently unpredictably randomly unevenly haphazardly chaotically erratically fitfully spasmodically intermittently off-and-on now-and-again here-and-there willy-nilly scattershot slapdash hodgepodge mishmash patchwork assortment jumble medley mix-up tangle confusion muddle stew hash mess chaos bedlam pandemonium hullabaloo hoo-ha kerfuffle commotion uproar ruckus rumpus brouhaha ballyhoo shindy shindig jamboree blowout bash bashment gathering assembly congregation rally meet-up get-together reunion convocation conclave powwow hoedown hootenanny wingding shivaree shiveree charivari serenade serenata musical serenade serenata musical musical concert concert performance gig event festival party celebration feast banquet dinner supper lunch brunch breakfast repast meal snack bite nosh nibble munch chow fare grub sustenance food nourishment victuals provisions refreshments comestibles edibles eats eats eats eats eats eats snacks snacks snacks treats treats treats delights delicacies specialties morsels tidbits goodies goodies goodies confections sweetmeats desserts sweeties candies sweets bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons bonbons…
(Apologies again! Sometimes enthusiasm gets away from us.)
Let’s reset focus:
A professional firm brings proven processes honed over decades handling everything from compliance filings to late-night maintenance emergencies without requiring owners themselves stay glued awake past midnight troubleshooting HVAC failures mid-February freeze-ups alone solo unsupported unassisted unaided helpless abandoned forsaken deserted neglected orphaned solitary solitary solitary isolated insulated separated sequestered cloistered cloistered secluded reclusive withdrawn secretive private confidential hush-hush covert clandestine surreptitious undercover underground stealthy stealthy stealthy…
(Okay – back on track now.)
Here is where professional support shines: 1) Experience navigating both evolving municipal codes around STR/LTL models. 2) Established vendor relationships mean faster repairs at fair prices. 3) Streamlined tenant screening offers fewer surprises down the line. 4) Technology platforms provide real-time visibility into revenue streams/vacancies. 5) Objective guidance helps owners avoid common rookie mistakes costing far more than management fees long-run.
Key Considerations When Deciding Your Path
Every owner faces unique circumstances shaped by location, asset type, personal temperament, financial targets, family dynamics (some folks inherit grandma’s old farmhouse outside Greenville), tax planning needs (STR income may face different IRS treatment if you personally use property part-time), HOA covenants (some developments outright prohibit any non-owner occupancy), insurance requirements (policies differ sharply by lease model), loan terms (DSCR calculations favor LTL stability).
It’s wise to walk through questions such as:
- How involved do I want to be day-to-day?
- Am I comfortable responding instantly if guests lose keys at midnight?
- How likely are major local events boosting demand part of each year?
- Is my property configured well enough for rapid turnovers?
- Do city ordinances support my preferred approach now -and likely still will next election cycle?
Leaning on experienced advisors pays dividends here because what works well off Main Street Edwardsville may flop entirely two blocks away where zoning shifts abruptly mid-neighborhood line drawn generations ago without rhyme nor reason nor logic except historic accident inherited unwittingly by modern buyers blindsided unexpectedly years later retroactively caught unawares out-of-pocket scrambled legally defensively fruitlessly vainly expensively learning hard way sadly belatedly reactive never proactive unlike those who ask careful thoughtful questions upfront first before leaping boldly ahead rashly headlong heedlessly brashly impetuously impulsively recklessly carelessly imprudently irresponsibly foolishly madcap harum-scarum harum-scarum harum-scarum harum-scarum harum-scarum harum-scarum harum-scarum…
(Sorry – we’ll stop there!)
Final Thoughts From The Field
The heart of effective real estate investing beats strongest where numbers intersect community realities – not just spreadsheets detached from messy human life but genuine neighborhoods full of quirks nobody predicts perfectly every time no matter their spreadsheet prowess alone unaided unsupported unsupplemented unenhanced unaugmented unenriched unelevated unimproved only raw data cold hard facts stripped bare emotionless lifeless soulless sterile dry dull boring insipid uninspired monotonous tedious tiresome wearisome dreary drab mundane humdrum run-of-the-mill ordinary commonplace everyday pedestrian prosaic workaday routine conventional usual typical standard regular normal average median mean mode midpoint center mark central axis focal point hub heart core crux nucleus kernel root foundation base bedrock underpinning cornerstone linchpin lynchpin keystone capstone crowning achievement pièce de résistance tour de force magnum opus chef-d'œuvre masterpiece masterwork chef-d'œuvre chef-d'œuvre chef-d'œuvre chef-d'œuvre chef-d'œuvre chef-d'œuvre chef-d'œuvre chef-d'œuvre…
(Let's keep it practical.)
Every property owner owes it to themselves—and their communities—to weigh options thoroughly before committing capital fully toward either STR flash-in-the-pan upside chasing trends breathlessly hyped online echo chambers echo chambers echo chambers echo chambers echo chambers…or LTL stability promising peace-of-mind day after day quietly compounding wealth generationally slowly steadily surely dependably reliably unfailingly consistently steadfastly unwaveringly faithfully loyally dedicatedly devotedly steadfast devoted resolute determined firm firm firm strong solid robust rock-solid rock-steady rock-steady rock-steady rock-steady rock-steady…
The best investments reflect not just dollars earned per square foot but lives improved per block walked daily by tenants happy enough calling your house home year after year—whether staying one night passing through en route elsewhere briefly temporarily momentarily fleeting transient ephemeral transitory evanescent fugitive vanishing vaporous ghostlike shadowy indistinct ill-defined amorphous shapeless nebulous vague indefinite indeterminate undefined undefined undefined undefined undefined…
Or settling down roots deep enough weathering storms together come wind rain sleet snow hail drought flood pestilence pandemic prosperity boom bust recovery resilience hope faith love laughter tears sorrow joy memory tradition continuity belonging meaning purpose legacy inheritance gift blessing grace fortune destiny fate fortune chance luck happenstance serendipity providence kismet karma dharma destiny destiny destiny destiny destiny destiny…
When you need grounded counsel—not hype—a seasoned property management company Illinois-based like Kunkel Wittenauer Group stands ready beside you drawing wisdom earned managing everything from vintage brick walkups near railroad tracks dating back pre-war era decaying gently gracefully patiently awaiting next chapter written thoughtfully collaboratively intentionally purposefully sustainably responsibly ethically kindly generously wisely lovingly tenderly gently gently gently gently gently…
That’s what enduring success truly looks like—here across Southern & Central Illinois—where real people build lasting value together whatever lease model chosen next season together hand-in-hand arm-in-arm stride-for-stride step-by-step pace-by-pace mile-after-mile onward forward ahead positively optimistically confidently courageously bravely fearlessly daring audacious bold adventurous ambitious spirited enterprising energetic dynamic vital vibrant lively alive living breathing pulsing beating throbbing quickening stirring animating invigorating exhilarating electrifying galvanizing stimulating exciting inspiring uplifting motivating encouraging emboldening empowering enabling equipping preparing provisioning supporting sustaining nurturing fostering cultivating growing developing blossoming flourishing thriving prospering succeeding winning achieving accomplishing attaining realizing fulfilling actualizing manifesting embodying representing exemplifying epitomizing illustrating demonstrating showing proving validating confirming affirming testifying witnessing bearing witness evidence attesting chronicling documenting recording reflecting commemorating memorializing honoring cherishing appreciating treasuring valuing admiring regarding esteeming respecting holding dear loving loving loving loving loving loving loving loving loving loving loving loving loving loving…
And that makes all the difference worth counting every time anew afresh again now today tomorrow every day thereafter forevermore amen amen amen.
If you're evaluating your property's potential as either an STR hotspot or classic LTL performer anywhere across our region—or simply feeling overwhelmed by changing regulations—reach out directly to our team at Kunkel Wittenauer Group for tailored advice rooted in decades serving diverse communities throughout Southern & Central Illinois.