The rental market is changing. Thanks to the increasing popularity of sites such as Airbnb, the demand for short-term lets is on the rise: research by the Association of Residential Letting Agents found that more than a quarter of landlords (26%) have seen an increase in enquiries about short-term lets. Landlords are perfectly placed to take advantage of this trend, so if you’ve been wondering whether short-term letting is right for you, here are the pros and cons to help you decide.
What is a short-term let?
Typically, a short-term let is for any length of time up to 6 months. Short-term lets are used by all kinds of people for all sorts of reasons. For example: people needing somewhere to stay for an extended holiday, people needing temporary accommodation (e.g. while renovations are being carried out on their homes), people working temporary job contracts away from home, or people researching an area before buying property there.
The biggest draw of short-term letting is usually the profits. Landlords can charge up to 30% more for a short-term let than a long-term one, and with these sorts of lets being in such high demand, it’s easy to see how lucrative this market can be. Of course, there are many other benefits for landlords too. Short-term letting offers you more flexibility (for example, you could rent out your property on a week-by-week basis) which is perfect if you will eventually need to use the property, or if you are thinking of letting out your own home to go on a long holiday. If your property is in a popular area then you should have lots of potential tenants to choose from, and not being tied into a long contract means that if you do end up with a nightmare tenant, you won’t be stuck with them for too long. Short-term lets also allow landlords to adapt to rising rents more quickly, and can be extremely useful for plugging the gap if your property is standing empty between long-term tenants.
Short-term lets aren’t all profits and freedom, however – they do involve a lot more work than long-term lets. To begin with, properties being let for a short amount of time are usually offered fully furnished, with all utilities included, meaning it’s up to landlords to sort out the furnishings and to pay for gas, electricity, internet, council tax and TV license (so be sure to factor these costs into the rent). There is also a higher risk of wear and tear with a short-term let, since tenants won’t necessarily take great care of a property they’re staying in for a short time, so you will have to allow more time and money for check-ins and check-outs, repairs and cleaning. Finally, short-term letting is by definition uncertain: you could find that your property stands empty during unpopular seasons, and this could easily eat into the profits you make when it is occupied.
How to set up a short-term let
If you have weighed up the pros and cons and decided that short-term letting is right for you, there are a few things you must do. First, check whether your local council allows short-term lets, or whether it requires a minimum amount of time for a rental contract. Second, if it’s your own home that you will be letting out, check the terms of your mortgage to make sure you are allowed to do so. Third, buy adequate home insurance – you will usually need liability cover for any damage, and loss of income cover in case something happens to make the property temporarily uninhabitable. Finally, prepare your property by ensuring it meets all legal standards for health and safety, including gas, electricity and fire regulations. Once all these things are in place, you should be good to go!
Short-term letting can involve higher risks and more work, for potentially more reward. If you do decide to take the plunge, you might just discover a whole new way to think about letting.
Do you have a property to let in Bristol? Contact Gough Quarters today to get started.