Many people actively earn a decent passive income, with some making up to 30% more profit, by renting out their investment properties and holiday homes on short-term let platforms like Airbnb. However, before you rush to upload a listing, consider carefully the pros and cons of both short-term and long-term rentals.
Short-term rentals: The pros
Earning Higher Profits – Recent statistics reveal that short-term lets can secure homeowners profits 60% higher than those from long-term lets. For instance, a property earning £1,000 as a long-term let could potentially triple its earnings as a short-term let. Checking nightly rates on platforms like Airbnb quickly shows the significant financial gains available.
Enjoying Diverse Interactions – If you love meeting people from all over the world, you’ll find great value in short-term letting. It offers the chance to meet a variety of interesting guests, sharing experiences that can greatly enrich your life.
Experiencing Greater Flexibility – As the owner of a short-term let, you control when and how long you rent out your space. Should your circumstances change, you have the option to remove the listing or move into the property yourself. For example, if you want to use your Airbnb for a family holiday during the summer, you can easily block out those dates on your calendar. This level of flexibility is unattainable with long-term letting.
Short-term rentals: The cons
Staying On Call – When renting your place as a short let, you must be available around the clock to meet guests and respond to their messages. Listing your property on websites like Airbnb involves handling numerous emails and guest queries, where delayed responses can negatively affect your ratings and visibility on the site.
Frequent Cleaning – New guests arriving weekly means you’ll be doing a lot of dusting, vacuuming, and general cleaning, not to mention regularly washing towels and bed linen. If you dislike household chores, consider hiring professionals, but remember to set an appropriate cleaning fee to cover these costs.
Building Trust with Strangers – Trusting strangers with your space can be more challenging than with a long-term tenant who has undergone thorough reference checks. While platforms like Airbnb generally maintain a high level of trust between guests and hosts, as an Airbnb host, you must be comfortable with welcoming strangers into your home.
Engaging in Marketing – Due to the high turnover of guests, short-term lets require ongoing promotion. You’ll need to keep your listing visible on platforms like HomeAway and Airbnb and use other online marketing and social media tools to attract guests.
Navigating Legal Regulations – In some areas, like London, regulations restrict property owners from renting their places as short lets for more than 90 days a year. Always verify local regulations to avoid fines or legal issues when choosing to rent out your property as a short let.
Long-term rentals: The pros
Enjoying Peace of Mind – Hosting long-term tenants means you don’t have to constantly market your property. As a property owner, you can relax knowing your property will be occupied for an extended period, requiring much less effort from you compared to managing a short-term let.
Securing Guaranteed Income – Although short-term lets might offer higher nightly rates, they don’t guarantee maximum occupancy. With long-term tenants, you secure a steady income that is locked in for the duration of the rental agreement.
Benefiting from Invested Tenants – Long-term tenants tend to take better care of your property, knowing they will live there for at least six months. Most of them strive to maintain the property to a high standard, which is a significant advantage for you as the owner.
Long-term rentals: The cons
Dealing with Being Locked In – Life often presents unexpected twists and turns. Being bound to a 12-month contract with a tenant may not be ideal if your circumstances change. Long-term lets limit your ability to adjust occupancy plans or invite friends to stay in your rental during special occasions like Christmas, leading to a lack of flexibility that many owners find challenging.
Relinquishing Control – In a short-term rental, you have the freedom to enter the property after guests depart and manage maintenance and cleaning as you see fit. However, with long-term tenants, you surrender this control. You become dependent on the tenants for the care and maintenance of your property, which can be a significant concern.
Calculate Your Potential Short-Term Rental Income
After considering the pros and cons of short-term and long-term rentals, you can now make an informed choice about what’s best for your property. Consider using our free online calculator to estimate your property’s income potential as a short-term let before making a decision. You may find the amount you can charge per night surprising. For advice about your earning potential, contact Keey. We offer assistance in managing the hassles of running a short-term let, allowing you to enjoy a steady income with ease.