Is now a good time to buy a holiday home in the UK? With abroad travel still clouded by...
Short term and long term lets are best differentiated by their purpose, rather than the periods of time that they are rented out for.
Generally, a short term let is a property that is let out for up to 6 months at a time, however they are more commonly aimed at offering temporary accommodation for tourists and holidaymakers.
Long term lets provide a primary residence for those not wishing to buy a property, long term let agreements tend to last either 6 or 12 months at a time.
By definition, a short term let is a property that is let out for no more than 6 months at one time. However, their more common purpose is for tourists and holidaymakers to rent out for shorter periods (usually from 1 night up to a few weeks) after the demand for hotel alternatives has increased in recent years.
The flexible pricing strategy available with short term letting will also increase your income potential.
Short term lets are often priced daily, as opposed to long term lets which are usually based on monthly pricing models. If your short term let is successful in terms of bookings, this will result in potentially a much higher return than if you let your property long term.
Our guide on how to price your holiday home has more information on how to get the most out of your short term let.
Letting your property out short term allows you to regularly adapt your pricing according to demand. If you choose to enter the long term letting market, then your rental rates will be fixed in conjunction with the agreed contract, for a minimum of 6 months.
For example, in the summer months when demand is at its peak, you can increase your prices to make as much profit as possible, as customers are still likely to book anyway. Likewise, in the low season when bookings may not be as frequent, you are able to reduce your rental prices to continue the flow of bookings and consistent income.
If you prefer the more hands-on approach of being a property lessor, the short term letting market is perfect for you. The quick and frequent changeovers mean that you have a chance to complete regular checks, clean and fix anything that may have broken.
This is different to owning a buy to let property, as it is much more difficult to access your property on a regular basis. The reporting of maintenance is also the responsibility of your tenants, rather than you being able to consistently check yourself.
A long term let is generally classed as a property that is let out for a minimum of 6 months at one time. Long term lets provide a primary residence for people wishing to rent for extended periods, rather than investing in a property of their own. Long term let agreements are usually agreed for either 6 or 12 months.
Although long term letting does not allow you to regularly change your rates based on demand, it does offer a guaranteed amount of income every month. There is no estimating how much income your long term let may yield, which benefits those looking for a stable investment.
Short term letting may potentially generate a lot more revenue for its owner, however it is not guaranteed that you will fill up your calendar with bookings as there are many factors that can influence this. A long-term letting agreement means that you will have a tenant that will be paying you a certain amount of money.
Long term letting is no stroll in the park, that’s for sure. However if you don’t have much time on your hands and would be unable to deal with regular changeovers and cleaning duties, long term letting may be the right path for you to choose.
As your tenants will be occupying your property for longer periods, maintenance and other checks are required less frequently. It is also more likely that your tenants will treat your property with care, as it is temporarily their home.
If you don’t think you have time for the little things that come with holiday letting, Sykes’ Managed Services offer a helping hand to suit your specific needs.
One of the benefits of long term letting is that the added expenses that come with property letting can be passed onto your tenants.
Added costs such as utility bills and council tax can be included in your rental rates, rather than paying for them yourself.
*Based on a 7 bedroom property in the Lake District with bookings between October 2017 to September 2018.
Are you on the phone to our call centre? Your Customer ID is: