Are Short Term Rentals a Good Investment?
Airbnb have made short-term lets popular over the past few years.
And rightly so. Short-term lets are perfect for attracting holidaymakers, in particular. If you’re fortunate enough to live in a seaside resort, beautiful countryside location or vibrant city then the summer months may just be a veritable goldmine for you. Actually, with the city location you could be lucky all year round.
And that’s the nub really. Short-term lets are great for holidays and weekends or locations such as cities which are busy all year round. But what about the colder times of year when nothing much is happening in those seaside resorts or picturesque countryside barns? Your property may not be as much in demand at these times and that’s when void periods start creeping in (ie weeks go by when you don’t have tenants).
Still, it’s possible to mitigate this in charging much more for a short-term rental than a longer one. Some short-term rentals actually cost twice as much than if the same property was rented long term ie for one to two years. But first…
What Are Short-Term Lets?
A short-term let is a property which is rented out overnight, for a few days, up to a week or a fortnight. Perhaps even a month. You get the idea…
This is in contrast to a long-term rental which is at least six months to a year and longer. At this point, you would normally provide the tenant with a legal document known as an Assured Short Tenancy (AST).
Incidentally, it’s not just on Airbnb that you will find short-term rentals; your local estate agent may just offer them too.
Who Makes an Ideal Tenant?
A tenant looking for a short-term rental could be someone who is just moving to the city/town etc for a job. He or she wants to check out what’s available at their leisure before signing a long lease.
Short-Term Rentals Can Be Difficult to Fill
The words every landlord dreads hearing is ‘void periods.’ This is when their flat remains unoccupied and they themselves have to pay the buy to let mortgage.
You will almost certainly experience void periods with a short-term rental. And which is why landlords charge so much for a short-term rental ie it’s to cover the void periods. Then there is the cost of the on-going marketing to find new tenants and the cleaning whenever a tenant moves out.
When Is the Best Time to Short-Term Let?
In London you can probably rent all-year round provided you’re near to attractions, restaurants, good coffee shops and excellent transport links into the heart of the city.
If you live in a holiday town, then obviously during the spring and summer is best time for you. For countryside locations there is the summer, but also Christmas and New Year lets as well.
Can I Do Both – Long and Short-Term?
The short answer is “yes.” You could always rent out your property on a short-term let in between longer-term rents. Student landlords do this during the summer months, for example. It may also work for you.
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February 12, 2021
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