With the property market in a state of flux, even the traditional rental market appears to be cooling a little, particularly at the high end of the market. With that in mind, 2019 needs to be the year that landlords are more creative with their portfolios and make sure that they’re not faced with any unnecessary void periods or cash flow headaches, particularly with the upcoming tax changes hitting.
Landlords have a perfect storm against them and the forward thinking amongst them will be the most successful at weathering it.
The rise in popularity of home stays through the likes of Airbnb and others means that the ‘super’ short let market is becoming an increasingly attractive option for landlords. There’s a very sound reason behind this: The seasonality of the short let rental market complements that of long lets. They’re both cyclical in nature and they work well at opposite times.
The long-let market typically quietens down during the summer period or over Christmas, and yet this coincides with the peak seasons for short-lets.
This type of short-let, letting homes out to holiday makers, is usually for a duration of 7-14 nights, but can be as long as three months.
This opportunity can be extremely lucrative for landlords. The gross rental price for short lets can be higher per night than that of a long let and even when you work with professional short-let providers, your net income will typically be similar amount to long-letting, providing you the peace of mind that you can hold out for the right offer from a tenant without painful voids.
Top tips for landlords considering short-lets:
Before landlords venture down the short-let route, it’s wise to think about the key considerations and what is different. If you’re tempted to do this, let’s look at the main areas that you need to consider:
Firstly, short-letting falls into the hospitality sector. Why? These guests are opting to stay in a home rather than a hotel. This means that they will expect a certain standard of home and they expect issues to be resolved immediately. They’ll want the comforts that come with a hotel room and the service as well.
As a landlord, you can either opt to manageshort lets on your own or use a specialist in this field. If you go it alone, you’ll need to take photos of the property yourself, advertise your home and handle the bookings and you’ll need to make sure you have specialist insurance to cover your property and the building as well.
If you choose an agent everything is taken care of from professional cleaning of your property, vetting and checking-in of your guests and of course the most comprehensive insurance on the market.
A good idea is to make sure that the short let specialist you use is a member of the UK industry body STAA (Short Term Accommodation Association) who sets out clear guidelines and standards for looking after homeowners as well as guests.
Merilee Karr is the founder and CEO of UnderTheDoormat, a London-based short-term lettings provider.