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How to flexibly earn income during ‘void’ tenancy periods

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.

Poll: Do you agree that 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?

PLACE YOUR VOTE BELOW

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    Personally I wouldn't be interested in short lets, most of my tenants stay a long time, I look after good tenants , a void can be use full for works to be carried out, but my void periods are normally less than a month.

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    The last void period I had was 6 months and the property was refurbished before the last let.
    How things differ in each locality.

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    Seems you are very unlucky in your area, here in east anglia we have a strong demand for rental properties, I am one of very few landlords around here that will consider pets which might give me an edge, but what will happen when I am no longer allowed to hold an extra deposit ? maybe I shall have to ask for an increased rent from tenants with a pet.

     
  • Vanessa Warwick

    This article fails to address some important points concerning this activity:

    1. If you have a BTL mortgage on your property, it would be a breach of T & C's to undertake short term lettings.

    2. If your property is leasehold, it is likely that this activity will be a breach of the T & C's of your lease and other leaseholders will complain about strangers coming and going and may report this to the freeholder.

    3. If you have standard single occupancy BTL insurance, then this would be voided by this activity.

    Letting out to "guests" as opposed to tenants comes with a whole new set of compliance issues and anyone contemplating this would be advised to understand these, along with the risks and pitfalls.

    Whilst the headline rates look attractive, digging down into the granular detail is always advised.

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    Still the returns are far superior to normal let’s i am diversifying into it definately

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