Short term lets are the latest and most popular option when it comes to renting out a property, for both buy to let landlords and average people who have a spare room or two. Thanks to companies like Airbnb, the popularity of short term letting has increased massively over the past few years, with these sites making it easier than ever for anybody with a property to generate around 30-100% more income compared to traditional, long-term letting.
What is Short Term Letting?
Short-term letting is exactly what it sounds like – letting a property or room to tenants or guests for a 6 month rental agreement or less. A short term let agreement is generally for a short period of time, often up to six months but could be as little as one week or even one or two nights. A short term letting agreement is a popular option among people who are looking for somewhere to stay for just a short period of time and is often an ideal option for holidaymakers, business travellers, or people who need alternative accommodation while work is being carried out on their home, for example.
A short term rental contract UK does not only apply to entire properties, either. You can also rent out just one room in your property on a short-term basis, which is a popular choice among Airbnb users who are known as live-in hosts.
Why Short-Term Letting is Popular
Short term letting agreements have become more and more popular over recent years thanks to sites like Airbnb, says Upperkey. For homeowners, landlords and hosts, it’s popular as a flexible method to make money from spare rooms and vacant properties without the need to find long-term tenants and deal with the issues that can arise from this kind of renting.
Another advantage of short-term letting is that you do not need to own an entire property to rent out in order to take advantage of it. Many Airbnb hosts, for example, rent out spare rooms in their existing homes as a way to make an additional income. Since rates for short term lets are generally higher than long-term lets, and there is always a demand among people who are looking for somewhere to stay for a while, hosts and landlords are turning to short-term letting as a way to make up to 30% more revenue compared to going down the traditional route.
What to Know Before Short Term Letting
Whether you own an additional property or have a spare room or two in your home that you have considered renting out to make an additional income from, there are several things to be aware of before you decide if short-term letting is the right option for you. The first thing to be aware of is the short-term rental law UK, which will only apply to you if your property is based in the Greater London area. However, in the future, it is likely that there will be more restrictions on letting with a short term tenancy UK in order to protect homes for people who need to live in them.
Currently, in Greater London, short-term lets cannot be used for more than ninety days of the year. After this, you can continue to use your property as a long-term rental, or apply to the council for a permit to operate year-round as a short-term let. London is currently the only city in the UK where these restrictions are in place, however, it’s worth keeping up with the news if based elsewhere as it’s likely that similar rules may be introduced in the future, says Upperkey.
Preparing Your Property for Short-Term Letting
If you have an additional property or a spare room in your home and want to get involved with short-term letting, then there are several things that you may need to do to prepare. Make sure that you are ready for the initial cost of getting your property or room ready to rent out on a short-term basis.
You will need to provide at least the basics when it comes to furniture as most guests will expect to be provided with a bed, desk and seating area, and basic amenities at the very least. What you will need to buy will depend on whether you are letting out a whole property or just one room. You will also need to ensure that your property meets safety standards including ensuring that the boiler and plumbing have passed a Gas Safety Check, the electrical wiring is safe, and that the property or room is secure.
Finding Short Term Tenants
Once you have made sure that you are aware of the laws surrounding short-term letting in your area and prepared your property to rent out, it’s time to start finding short-term tenants.
Airbnb is a popular option for getting started since this is currently the most popular and well-known site in the UK for finding short-term rental properties available to let. All you need to do is sign up on their website and create your listing. It is a wise idea to have professional photos taken of the property, and focus on writing a description that is honest but highlights the best parts and also gives guests a better idea of what they can expect from the local area in order to increase your bookings.
If you are not sure where to get started, you can find Airbnb and short term letting management companies like Upperkey who can take care of all this on your behalf and create professional listings that will maximise your chance of finding short-term tenants or guests. Of course, Airbnb is not the only option to consider – there are several sites in the UK that are worth advertising on, just make sure that you sync your calendars so that you don’t end up with guests double-booked.
Ongoing Maintenance and Work
One of the downsides of short-term letting is that unlike a long-term let where you might visit yearly to check the property is in good condition, and deal with maintenance issues as they are reported by the tenants, short-term letting requires more work on an ongoing basis. In fact, managing an Airbnb or other short-term let property can often feel like a full-time job with all the cleaning between guests, communication with different tenants, and meeting with tenants to hand the keys over and welcome them to their stay.
Before you decide if short-term letting is the right option for you, Upperkey advises taking into account all the different tasks that you will be responsible for, how often you will need to do them, and if this is going to be feasible given your current commitments.
The good news is that even if you work full-time and would struggle to manage an Airbnb on the side, there are services out there designed to help.
Working With a Short-Term Rental Management Company
If you want to invest in and make money from short-term renting but are struggling to figure out how you will manage a property alongside your other commitments such as working full-time or raising your family, then you may want to consider working with a short-term rental or Airbnb management company.
These companies provide a service that allows you to relax and get on with your life while they take over all the work related to your short-term rental and you bring the money in. A good short-term let property management company can take care of everything for you with a full package, or there are partial packages or individual services available for those who can manage some, but not all of it.
You can get peace of mind while you are at work or home knowing that your short-term rental property is being professionally managed when it comes to advertising, guest communications, meeting guests, dealing with emergency call-outs and maintenance concerns, and cleaning and preparation in between guests.
Downsides of Short Term Letting
While there is no doubt that there are lots of pros to short-term letting, which is why it’s booming in popularity recently, there are some downsides to consider before you determine if this is the right option for you. One of the major cons of short-term letting is that unlike a traditional long-term let where you will get rental income paid each month that tenants are living in the property, there is no guarantee that your property is going to be booked enough for you to make the same amount.
Depending on the demand for properties like yours, there may be high vacancy periods. Along with this, maintenance can often be higher and cost more as larger volumes of short-term guests moving in and out of the property could lead to faster wear and tear.
Finally, the initial cost is often higher since you will need to provide a furnished property and amenities that are not important in long-term rentals.
Short-term rental contracts or letting agreements last for a short period of time, usually less than six months. They can be on whole properties or single rooms and are becoming a popular way of making an income.