If you own a property and want to use it to make an income, then short term letting might be something that you have considered. Compared to long-term rentals, short term letting can command a higher price for the convenience, making it an ideal opportunity for landlords to increase the profits.
However, unlike long-term rentals where there is often minimal work for the landlord aside from collecting rental payments and carrying out routine maintenance on the property, short term house lets, or short term flat rental can involve much more. Because there is more work involved, and in some cases less security in comparison with a long-term let, you may be wondering if short term letting would be a profitable business model for you. Here’s some information from UpperKey.
Short Term Rentals are Increasingly Popular
The good news for landlords who are interested in short term letting is that the market has boomed in recent years thanks to the rise of platforms such as Airbnb. The UpperKey believes that the perception of short term rentals is changing and an increasing number of people now prefer to book a private home for a short stay rather than a hotel or serviced apartment. With short term letting on the rise and the potential to make around 30% more than long-term renting, more landlords are embracing the idea.
What is Short term Letting?
Short term letting involves renting out a property for shorter periods of time, from just a few days to up to six months. Landlords who rent their properties on a short term basis might rent to guests or short term tenants who need a place to stay on a temporary basis, for example, if visiting the area for leisure or business, or if their permanent home is not habitable due to construction work.
Short term lets often fetch a higher price as tenants are willing to pay for the convenience of having somewhere they are not tied to living in for a lengthy period of time, and this can help to cover any losses during void periods. In general, the shorter the tenancy length, the more you can charge per day or week stayed.
Advantages of Short Term Renting
When it comes to short term lets UK, there are lots of benefits for landlords who are considering entering the short term rental market, say experts from the UpperKey. Short term house lets can be used for various purposes, including listings on platforms like Airbnb to be advertised to guests or tenants looking for a temporary place to stay. Along with this, you do not always have to invest in separate short term lease apartments to get the benefits.
More and more people who are searching for short term house rentals near me or short term flats to rent for a few days or weeks are willing to stay in a room within a private home, so simply having a spare bedroom available in your home could get you started making money in the short term rental UK industry.
Another main benefit of short term monthly rentals UK is that as a landlord, you get a lot of flexibility. You can choose the days, weeks, and months of the year that you want to make available for tenants to stay in your property, making it an ideal option to consider if you normally live in the property but it is empty for certain times of the year, for example, if you travel for work or to stay with family. Since tenants move in and out of the property frequently, another advantage is that the wear and tear is likely to be less and easier to spot quickly compared to conducting bi-annual or annual inspections of a long-term rental home, which means that ultimately, you could end up paying less for maintenance on your short term rental property by noticing and fixing issues at the earliest convenience.
What are the Downsides?
Like any business idea, it is important to weigh up both the pros and cons of short term flat rentals or any kind of short term property let business before you decide if it is the right option for you. While there are undoubtedly benefits of short term lease rentals for landlords, there are also some downsides to consider.
The main disadvantage to short term renting is that while you do get to offer more flexible flat rentals, there is typically more work involved for landlords. This includes moving tenants in and out of the property more frequently, more cleaning and maintenance tasks, and a higher risk of emergency call-outs since tenants are not going to be as familiar with the property as a long-term resident would be.
Along with this, the start-up costs are often higher since short term flats to rent are typically rented fully furnished, unlike long-term rental properties where tenants will usually provide their own furnishings as the property is a long-term home.
Short Term Letting Agents and Property Management
If you have a property that is suitable for short term letting but are unsure if you wish to go ahead given the amount of work that is involved with short term lease rentals, then you may want to consider the option of working with short term letting agents and property management companies such as the UpperKey.
Ultimately, these professionals provide a service that involves taking on all or most of the hard work that is involved with managing your property so that you can get on with your life and earn a passive income. While you will be charged a fee which is usually set at a percentage of the amount that you earn from each stay, or a fixed monthly fee depending on the agent or company you work with, many short term rental landlords find that this is worth the additional business expense for more peace of mind, avoiding becoming overwhelmed with the workload and increasing profits by leaving it to the professionals to move tenants into the short term rental property and ensure that they have a satisfactory experience during their stay.
What to Consider Before Short term Letting
If you have decided that short term rental UK is an ideal business model for you, then there are several things to put on your checklist and complete before you can advertise your property for short term letting and start welcoming tenants and guests. Firstly, you will need to find out about any restrictions in place by your local council. In London, for example, short term letting is limited to ninety days per year; once you surpass this you will be operating illegally if you do not have the appropriate licence.
You will also need to ensure that you have the right insurance coverage for your property so that you have financial protection in place if any claims are brought against you for harm to a tenant or damage to their property during their stay. If the property that you are planning to rent out on a short term basis is still mortgaged, then double-check the terms and conditions of your mortgage to ensure that short term renting is allowed. Once you have all of this in place, make sure that your property meets all necessary health and safety requirements and is legally compliant before advertising it as a short term rental.
Costs Involved in Setting Up and Running a Short term Rental
Compared to renting out a property long-term, there are usually more costs involved with a short term rental business. Most tenants who stay in your property for a few days, weeks, or months are going to expect the place to provide everything they need, and will not have furniture items, so it can be quite costly to get set up with fully furnishing the property including beds, sofas, dining furniture, white goods, televisions, lighting, storage, and more.
Bear in mind that you will also need to make sure that the utility bills for the property such as council tax, gas and electricity, water rates, TV licence, and broadband are paid on a monthly basis regardless of whether or not there are tenants in the property at the time, so consider this before setting your prices, and account for any periods that the property might be empty.
Once the property is set up, consider the ongoing fees for a property management service if you are going to use one, a professional cleaning service, Airbnb or other platform commission costs, maintenance costs, insurance costs, parking space fees if applicable, and anything else involved in the regular running of the property.
Property is a lucrative business, and short term letting is becoming an increasingly popular way to make money from a second property or even a room within your main property.