If you have an empty home then you may be wondering how to capitalise on it. Letting out your property on a short term or long term basis can be very profitable when done right, but it’s also very time consuming. There are also many differences when it comes to income streams and legal responsibilities, so our advice is to do a bit of research before deciding on your letting model.
Update Dec. 2018 / Check out our newest analysis of the best rental strategy for 2019, based on market data!
It’s not about one letting model being “better” than the other – it’s about finding out which one is best for you and your current situation. Here’s what you need to know.
A short term let is typically described as a rental period under six months. However, in most cases when people refer to short lets they usually range from one night to a few weeks. Thanks to the Airbnb revolution, which has opened up the world of homestays, short term rentals are a lucrative opportunity if you can guarantee high occupancy and high rates.
Short lets can achieve 30% higher rates and yields than long term lets, however you should take into consideration vacant periods – you will probably never run at full capacity. Managing a short term property also takes lots of time and effort, so you may need to hire a host management service or give up your time in order to ensure the successful running of the homestay property.
When letting on a long term basis you can decide on six or twelve month contracts. As a traditional landlord, when you have tenants in the property you have a consistent income every month, so don’t have to guess how much you will earn annually. Renting out your home in this way is also beneficial because the tenants will cover the energy bills, and demand for rental properties is at an all-time high.
In both types of rental agreements, there is the risk of damage to the property. However, with specialist landlord insurance and the Airbnb Host Guarantee, this shouldn’t be a problem to worry about.
Flexible letting models
There is no rule that you must pick one or the other. In fact, here at Hostmaker we recommend a flexible letting model which is a combination of short term, medium term and long term rentals to maximise your revenue.
By taking a wide range of bookings, it is possible to increase occupancy rates and seek out the highest profitable solutions. With current restrictions on short term stays, you can fill up the rest of the annual calendar with medium and long term rentals to ensure a steady, hassle-free income throughout the year. Whether it’s for 3 nights, 30 nights or 300 nights, Hostmaker can take care of your home.
Contact us to find out more about our flexible letting models and hospitality management services.