There’s often debate about whether it’s better to rent out an investment property as a short-term holiday let or as a longer-term assured shorthold tenancy. We’ve asked our Account Manager Jake to give us his thoughts and advice.
"Traditionally, many people would go for letting out an investment property to the same tenants for as long as possible. This covers costs and also allows owners to make a profit on the rental income – obviously depending on market conditions!
One of the main draws of this popular approach is the ease of forecasting rental income. It’s also believed that tenants would take higher levels of care over a property they view as ‘home’.
However, with ever-changing property climates and regulations for landlords, this approach simply isn’t as reliable as it used to be. Recent events such as the pandemic and staycation boom have led to increased demand for holiday homes, making this an alternative and attractive option for property owners throughout the UK.
But is it a reliable source of income? With the rise of short-term letting platforms such as Airbnb, it has become even easier to rent a property out as a holiday let. In particular, this type of arrangement could potentially net a higher rental yield than long-term counterparts, especially during-peak seasons and popular holiday periods.
Despite the potential for increasing rental yields, many landlords are reluctant to move away from the traditional shorthold tenancy approach. Holiday lets are seen as a hassle – lots of admin and lots of changeovers mean a lot more input from the landlord. Therefore, it’s no surprise that there’s now an industry of short-term let property management companies willing to step in and shoulder the workload.
Before making the switch from traditional long-term rentals to holiday lets, there are a couple of factors to bear in mind. A property must conform to specific criteria to qualify as a holiday let. The property must be fully furnished, available to book for at least 210 days per year. Landlords cannot count any time that they stay there themselves, and they need a consistent and pro-active marketing effort to ensure the property is continually let out and look after any issues which could arise.
Ultimately, it’s essential to research whether to go down the holiday let or assured shorthold tenancy route before deciding which one is most suitable for you and your property. While long-term rentals can offer a stable income and low upfront costs, holiday lets can offer greater financial returns, increased flexibility, and unique experiences and interactions."
Have a question? Looking to find out more about how a short-term let management company could be just what you need for your property? Drop our team a line…. email@example.com or call us on 0117 923 7947.
Comparing the advantages and disadvantages of short-term holiday lets vs assured shorthold tenancies
Assured Shorthold Tenancy