For a buy-to-let landlord, short-term and long-term letting options require a choice and understanding of how each letting model can cater to different needs and preferences, as well as the advantages and disadvantages of each.
What Are Short-Term Lets?
Short-term rentals are often preferred by individuals who are seeking temporary accommodation, such as business professionals on work assignments. These rentals come fully furnished with utility costs included, offering convenience for those who need a hassle-free, ready-to-live-in space. The profitability of short-term lets for the landlord can vary greatly. This may be dependent upon location and season, market demand, and the landlord’s ability to manage the costs.
Advantages and Disadvantages of Short-Term Lets
Short-term lets generally allow higher rental rates, making them potentially more lucrative for the landlord due to higher profitability. The landlord reaps the benefits of a higher degree of flexibility, able to use the property themselves whenever needed. Without a long-term fixed contract in place, the landlord can also access or sell the property much faster.
There are however many disadvantages to using short-term lets. With more management and ongoing work required, such a cleaning in between each tenant, management costs are higher. Higher tenant turnover can lead to less stability in occupancy rates, and therefore less stability in income. Turnover may also bring an increased risk of wear and tear, causing higher maintenance and repair costs. Empty properties in between rentals may increase security concerns, due to increased vulnerability to break-ins and damage, or issues relating to voiding of property insurance.
What Are Long-Term Lets?
Long-term rentals, typically lasting a minimum of 12 months, attract individuals seeking a stable, permanent residence. These rentals are usually unfurnished or partially furnished, and tenants are responsible for covering utility costs.
Advantages and Disadvantages of Long-Term Lets
Long-term lets provide a reliable and stable cash flow for landlords without the constant concern of having to find new tenants. Lower turnover may decrease risk of property damage and make maintenance more manageable and predictable, as well as allowing for relationship building with tenants. This may reduce issues related to damage and rent arrears. Long-term tenants contribute to a sense of community and continuity, enhancing a property’s reputation and appeal.
On the other hand, a longer-term commitment to a tenant can result in challenges. If the tenant turns out to be problematic, the eviction process can be lengthy. It may also be more challenging to repossess a property that is being let long-term compared to short-term. Long-term rentals generally command lower market rents and are subject to more rules and regulations, such as safe handling of tenant deposits.
Choosing between short-term and long-term lets involves weighing the pros and cons to align with the landlord’s individual goals and circumstances. While short-term lets offer higher profitability and flexibility, long-term lets provide stability and reduced risks of property damage. Ultimately, the decision of which route to follow depends on the landlord’s priorities, risk tolerance, and long-term investment strategy.
Fortunately, amongst the difficult decisions that do come in property management, there is an easy decision to make and that’s which Property Management Software works for you. With RENT+, regardless of the letting type, you are supported at each step of the process. Take the pressure off your shoulders with RENT+ and make lettings easy.