Letting your property can be a lot of work. It is best to decide whether a long-term or short-term letting period is right for you.
When done right, letting out your property can be very profitable, but it’s also very time-consuming. There are a lot of differences between each letting model and this can affect your legal responsibilities and your potential income.
Keep in mind that one letting model is not necessarily better than the other, they just require some different steps. Different types of letting are appropriate depending on what you hope to achieve with your property. So, doing your research ahead of time is a good start!
The team at Keey has broken down this task into three options to help you determine which is best for your situation.
There are many upsides to managing a short-term rental property.
Short-term rentals are characterised as a rental period shorter than six months. However, most tenants will prefer a period of one night to a few weeks when choosing this option.
In conjunction with the popularity of Airbnb, this option has opened up more possibilities than ever before for a low-cost and low-commitment business model. It provides a lucrative opportunity if you can guarantee high occupancy and high rates.
However, there are also downsides to this option. Statistically, short-term lets can achieve 30% higher rates and yields than long term lets. With a short-term let, however, your property might be vacant more often as you will experience a turnover of tenants. Due to a high turnover rate, it’s pretty unlikely that you’d consistently run at full capacity.
Managing a short-term property is also more demanding of your time and effort. So, you may need to hire a host management service or sacrifice more of your time to constantly seek out new tenants to ensure the successful running of the homestay property.
As a more traditional landlord, you can decide to let your property on a more long-term basis. This would usually be between six or twelve months.
When you have tenants in the property on a longer-term basis, you tend to have a more stable experience. You have a consistent income every month, so you have less to worry about when it comes to earning a living. Renting out your home in this way is also beneficial as the tenants will cover the energy bills, and demand for long-term rental properties is at an all-time high.
However, entrusting your property for an extended period means you need to trust your tenants. It is vital to screen people before they rent the property to make sure the risk of damage is low. This includes regularly inspecting the property to assess any issues and making sure the tenants are satisfied and continue to be a good fit for the property.
Flexible Letting Models
There is a lesser-known third option when letting out your property. A flexible letting model is a combination of short-term, medium-term and long-term rentals to maximise your revenue and letting potential.
By taking a wide range of bookings, you can maximise occupancy rates and create the most profitable solution.
With current restrictions on short-term stays due to the ongoing pandemic, you can fill up any available gaps in your annual calendar with medium and long-term rentals to ensure a steady, hassle-free source of income throughout the year.
Read Now: 5 Things You Shouldn’t Do As a Landlord
To Sum Up
Now that we’ve looked at short and long-term letting options and how to use these methods to your advantage, it’s time to move forward and apply them to your business plan. Keep in mind the distinct pros and cons of each, so you can potentially combine them to get the best of both worlds when renting out your property.
If these options appeal to you and you want assistance planning the best method for your letting business, Keey can help you. Contact us to find out more about our flexible letting models and hospitality management services.