As an investor, receiving a return on investment is the ultimate goal. Investors in the rental property are no different. Money matters are primary concern.
The rental property market, as it currently stands has a number of options at the disposal for the investor. Short term lets or long term let?
We break down the short lets. Over valuable advice to the landlord on all matters regarding short term lets.
What are Short lets?
Short lets are tenancies enjoyed by the tenants for periods of not more than 6 months. The rent paid for the lets covers for the internet, utilities and television. Usually, the properties are fully furnished with bed and kitchen packs – visit Draker Lettings.
They differ from serviced hotels in the sense that short-lets offer a personal property. Hence, give a sense of personal touch, comfort and privacy.
The Pros of Short Lets
- Offer higher rates compared to the long term lets- According to telegraph, short term lets have the advantage of higher rates.
Rates of up to over 25% above long term let rates.
- Offer Flexibility for the landlord – The landlord has the power in his hands to extend the let for a period. The period can be as little as a week or even months.
Landlord discretion in performing the let extension.
- Tax breaks and deductions – Property for short term let have tax breaks depending on local authority.
Therefore, be sure to check this out with local authority
The Cons of Short lets
- Maintenance and upgrade nightmare – To remain competitive in your trade you will have to invest in maintenance which will eat up a significantly into the profits.
Maintenance is a must.
- No guarantee of money in- The short term lets means there are periods that the property will not be rented.
Seasonal charging can help you with this challenge.
- Too much management – Again, competition is massive. To beat it you got to be a better manager than the competitors, especially in the short lets London market.
However, you can get a property management agency.
So before you decide you want to go down the short-let lane, there are some things you need to do;
a. Check with the council if the property is eligible for short term lets. Not all property is legible. Besides, even when property is legible there are variations in time limits you must be aware of.
b. Check the insurance status for short lets. Some insurance premiums cover not for short term lets. Therefore, it’s imperative you make yourself familiar with the terms.
c. Check for any additional concerns that may make your property less favourable as a short term let option. Like; noise management, location, accessibility among others.
Finally, the tip that surpasses them all, if you want to make more from your property you need to be one of two things;
1. A seasoned short term let landlord
2. Willing to engage a fantastic property manager.
Well, there you have it folks. You make the choice!