Long Term Lets Vs Short-Term Airbnb
Becoming a landlord brings with it a lot of decisions, such as ‘Will you turn your buy to let into a popular Airbnb or stick to the traditional short assured tenancy (AST) model’? To opt for the former your property must obviously be in a location that people come to visit en-masse. That could be because it’s in a popular city, a beautiful part of the countryside or it’s in a much-loved seaside resort. In other words, location is key.
Location is, of course, important for an AST too. Depending on who your target market is, it should be near parks and a good school for families. Young professionals, on the other hand, will probably want to be in the thriving town centre and near restaurants, bars etc – as well as their place of work.
Traditional buy-to-let isn’t as popular as it once was, thanks to the government cutting landlord tax savings. In fact, many landlords have already switched to Airbnb.
And, certainly, there’s no denying Airbnb is growing in popularity (72,000 advertised in London in October 2018) but will you get enough bookings to justify going down that route? Here we discuss the pros and cons of both:
What Are the Advantages of Airbnb?
- Free to list with only 3% charge per booking
- Earn up to £7,500 without paying tax (Rent a Room in your main home)
- Easy to use
- Change your rental price at a whim
What Are the Disadvantages of Airbnb for hosts?
- More tenants means more admin
- Property management companies want payment
- Increasing competition
- Renters not inclined to look after your property as well
- Difficult to get insurance
- Income can fluctuate (average occupancy in London is 11%)
What many people who use Airbnb don’t realise is that legally you’re only allowed to let out a property for 90 days in total under the government’s recently-introduced short-term rental regulations. These were specifically aimed at Airbnb rentals since the housing shortage means the government needs more long-term rentals to be available.
It’s possible to get round the ruling by opting for a ‘change of use’ for the property but it involves a lot of paper work. You could always switch to another platform when Airbnb automatically ‘block’ you after 90 days.
Advantages of Assured Shorthold Tenancies
- Tenancies are usually for a six-month minimum
- More security over income
- Tenants more likely to look after your property
Disadvantages of Assured Shorthold Tenancies
- You can’t increase the rent until the end of the tenancy contract
- If you want a bad tenant out legally then eviction can be long and costly
- Management companies charge a fee
A solution for some
Another way around the dilemma of whether you should go down the Airbnb route or choose the traditional path is… to do both.
Yes, really. You could rent out your property for a six-month short-term let over the winter period when folks are less likely to visit a beauty/seaside spot etc. Then, when spring and summer arrives, opt for the Airbnb letting model. Many landlords have been doing this for a few years now and found it to be a winning strategy. Perhaps you will too.
If you are looking for an Airbnb in the long-term rental space then just visit propertyloop.co.uk.
Built by experienced property investors and landlords, similarly to Airbnb the website connects renters and owners directly. Why not sign-up to see it in action?
It’s a free platform that only charges a small fee once you get your rent money in. Your property is featured on all major search and comparison portals as well as advertised by PropertyLoop everywhere else on the Internet.
You don’t have to worry about finding good renters since that’s the job for the platform. Receive offers straight to your mailbox and select the renters that are right for your property.
Need access to the busy London property market? No problem at all! PropertyLoop is the London market specialist with years of experience and unique knowledge. Whatever your needs are, you can always speak to our friendly support staff. Renting property is made as simple as one, two, three…
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February 12, 2021
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