Deciding the best way to raise an income from your vacation home or investment property is one of the big questions for current and would-be owners. Since the introduction of short-term letting platforms—and the higher rents and increased income they provide—filling apartments with a stream of tourist bookings has become incredibly popular and easy. Driven by sites such as Airbnb, VRBO, HomeAway, and even Booking.com, the tourist accommodation market has been inundated.
The amount of properties being converted to short-term tourist accommodation has forced governments to look at how it’s affecting both the culture of their capitals and biggest cities, as well as the impact on the residential market.
However, new laws have been implemented to accommodate the change. In many cities, easy-access short-term listings are regulated by the number of rentals a property can entertain in any one year. Those exceeding the limits must change the usage of the property to a business; responsible for higher costs and fees. Mid-term lets manage to bypass many of the associated problems, and at the same time, offer a few additional advantages to boot.
The difference between short and long-term lets
Long-term lets
A long-term let is often seen as the safest and least effort opportunity for landlords. This type of let is typically a minimum 6-month or 1-year term, with a rolling month-to-month or yearly contract following the initial period.
Although the rent is significantly lower, occupation is a given. Finding new tenants is required much less frequently, and hopefully, they will treat it with the respect that their home—and your property—deserves.
Mid-term lets
A mid-term let is generally accepted as one between 3 and 9 months. However, that guideline will vary from platform to platform and country to country.
Covid-19 impact on short-stay rentals
The Coronavirus pandemic has had an enormous impact on tourism and holiday stays. It’s going to be a slow journey back to what we were used to, and when it comes to filling those long-empty properties, the mid-term rental offers investors, and owners access to a more-likely and readily available set of markets.
1. Suffer less downtime
Depending on where a property is located, and the likelihood of finding suitable long-term tenants, an investor could experience lengthy periods of apartments standing empty while a new and appropriate tenant is found. With mid-term rentals, the owner knows when they need a tenant and can market for them in advance. Having a long-term tenant drop the news that they’re moving out often won’t allow the landlord the correct amount of time they need to find a replacement.
2. Achieve better rates
A mid-term rental will achieve a far better rate than a long-term let. The property will be rented fully furnished with services provided, each adding to the value of the rental, and bumping up the top line. It’s incredibly unlikely that a tenant will want to furnish a property for a six-month stay or welcome the inconvenience of having to source and connect each utility and service. If they can move in—and out again—with minimum effort and baggage, it’s worth the premium they’ll be happy to pay.
Take advantage of different markets
Given the tourist market is so unpredictable right now, markets that are considered more essential are those that landlords should be exploring to fill their properties in the current climate.
Business travellers
The working world is trying to reengage in life in a manner as near to normal as possible. With that, there are consultants, specialists, managers and teams who need to travel to new work opportunities, company headquarters or remote offices. And while they do, they need somewhere to stay. According to predictions, this is one of the most likely and quickest areas set for recovery. These types of tenants are likely to need several months of accommodation, making them an ideal mid-term let candidate.
Students
Interns and short-course students studying topics too impractical to carry out online will require accommodation for the duration of their studies. This has offered a steady market for many years. As travel restrictions are lessening, this is a market readying to open again.
Those in between homes
Mid-term lets are very popular with couples and families between homes. Having sold one property at a time that doesn’t fit with a moving-in date for the next, this temporary mid-term fix is ideal. A fully furnished home-from-home is the ideal solution for these renters.
Relocations
Many expats and retirees seeking a life in a new country will test-drive locations utilizing mid-term lets. Being able to live as a resident in a new town or city for 6 months or a year before committing to buy a home of their own gives an authentic flavour of living somewhere new. It also provides those who have made up their mind that it’s where they want to live some breathing space to find exactly the right property for them, in the best area for their budget.
Enjoy higher quality tenants
The tenant creating a mid-term home-from-home typically comes from a preferable background than the typical tourist who will often show little respect for a property they’re only going to live in for a week or two.
Less time spent on paperwork, admin and changeovers
If you consider you’d need up to 15 or 20 different short-term tenants to cover the duration of a mid-term let, it’s easy to see how much time and effort you stand to save. That’s a lot less marketing and communication. And imagine the time you’ll save without the multiple deep cleans, changeovers, arrivals and departures.
Reduction in costs
As outlined in the previous paragraph, there’s a lot less effort required with one mid-term let over multiple short-term bookings. Despite the lower rental fee, you still stand to achieve as good an income due to the amount of money you’ll save without all of that extra work and expenditure.
Setting up a mid-term rental
Market your property
You can find mid-term guests on traditional short-term let platforms, but chances are you’ll have better results utilizing more niche and appropriate websites.
Fine-tune your listing
The information provided in adverts should be less about the tourist lifestyle available to your guests around your property and more about local conveniences and amenities. Your guests will be more interested in where the nearest grocery shops and public transport links are over the best photo opportunities, galleries and museums.
Adjust your rates
You’ll need to do plenty of calculations to find out the correct rents to charge, to make the same, or a better income, under your new regime and lower costs. Your guests will expect a cheaper rate than a short-term option, but higher than the long-term rent.
Screening your guests
It’s relevant to find out more about your guests than if you were just housing a couple of tourists for a week or two. These people are going to be living in your property for much longer periods, so you should check that they’re respectable and responsible.
Create the correct paperwork, contracts or agreements
With any rental, you need a legal contract designed to protect both you and your guests. You also need to know the legal methods of managing the deposit in your country. We always recommend taking legal advice and having a solicitor draw up all contracts.
Or you can leave the hard work to us…
That’s right. We know how valuable your mid-term rental guests are and how to take advantage of all the benefits they create. Our team are experts at matching tenants to properties, and also at managing every step of the process.
We believe we’re your very best bet in finding the right tenant for your property and handling everything it takes to home them in your property on your behalf. You won’t find a simpler system. We do all the work while you earn the profits.
If you’re thinking about how to make mid-term letting work for you, give us a call. We’ll tell you what you can hope to achieve and how much you stand to make by letting us take care of your business.