Short-term rentals are becoming more common and many landlords are now dipping their toes into this new(ish) form of renting. But should you consider abandoning traditional long-term letting and think about renting your property out on a short-term basis? We weigh up the pros and cons here.
Six months was the benchmark for short-term rentals. But with the advent of Airbnb and similar concepts, landlords can now let their properties for a matter of days. So, a short-term rental can be anything from a week to six months.
A short-term let can be a flat or a house. Or even a single room. Though much depends on location. A Cornish cottage will appeal to different tenants than will a flat in Scunthorpe. If you do have a cottage in a Cornish resort it's obviously suited to renting out as a holiday home. But holiday lets aren’t the only option for short-term rentals. The flat in Scunthorpe will appeal to a worker engaged on a short-term contract at the steelworks or one of the new building projects in the town.
As we mentioned above the obvious tenants are those looking for a holiday home. But plenty of other people are looking for a short-term lease. Those looking for temporary housing include:
There’s a growing market in short-term lets. And as we've discussed there are plenty of potential tenants out there. But if you're a landlord thinking about branching out into this market what are the things you should consider? Let's look at the pros and cons of short-term rentals.
Higher rents are the main advantage to short-term letting. Short-term rates can typically be up to 30% higher than long-term rates. People looking for temporary housing are happier to pay a premium. Especially when an employer is picking up the tab for a corporate let.
Short-term rentals also provide more flexibility for the landlord. If you want to take time off you can. You don't have any long-term tenants to worry about. But it's private landlords with a single property who will find this most advantageous. Perhaps you want to live in your property for part of the year but spend the rest of the time in a home you own overseas? Short-term lets are ideal in this situation. You only have to rent out the property when you choose. And you have the flexibility to decide exactly when that is.
There could also be tax breaks associated with short-term rentals. The Rent a Room scheme could provide £7,500 tax free for renting out a room in your property. You can learn more about the Rent a Room scheme here.
There's plenty of pros to short-term rentals for landlords to think about then. But there are also a lot of cons to think about too.
Before getting too excited about the prospect of higher rents there are some significant disadvantages to short-term rentals:
There is definitely an attraction to the income and flexibility short-term renting provides. But as we've seen there are challenges too. So, what do you do?
You must crunch the numbers and assess the suitability and location of your property. Do the positives outweigh the negatives? It’s a tricky decision but short-term renting will no doubt appeal to some landlords. As ever the final decision is a personal one.
Private landlords can find tenants fast by listing their property with MakeUrMove the online letting platform bringing landlords and tenants together.