What is a short-term rental?
A short-term rental is a property that is let for only short periods; they will usually be let by the month and will never be let for over three months. Historically, short-term rentals have sometimes received a bad reputation, as there can be anxiety around the steadiness of a living situation. However, there are many situations where a short-term rental can be the perfect solution.
When are short-term rentals useful?
Short-term rentals allow tenants to find temporary accommodation, which is often helpful. They are popular amongst visiting short-term workers, staying to fulfil a contract, or looking to bridge the gap between longer-term lets. For example, if a professional has relocated on short notice, a short-term let might buy them time to find somewhere to settle in the longer term.
Short-term rentals are also popular with property owners who are having renovations conducted on their own properties. When a kitchen is being replaced or an extension is being built, houses can be unusable, and families might need a short-term solution. Hotels are expensive and don’t offer the freedoms of a home, meaning that renting a fully furnished property for a month becomes an appealing option.
Financially sensible for some landlords
Most of the time, having a high turnover of tenants is bad news and interrupts an otherwise steady cash flow. However, sometimes landlords might find themselves in an unusual situation, and short-term letting can offer an income when mid- or long-term options are not viable.
If a property is due to sit empty for a specific period of time, maybe because there is work scheduled in the near future, or a long-term tenant cannot be found, a short-term let can plug the gap.
Alternatively, the property might be empty as the landlord is preparing to sell the property but isn’t ready to do so yet. This might be because they are waiting for the market to improve or because they want to sell later in the year. Whatever the situation, having an income is always better than having none.
Keeping a property empty costs money; there is a mortgage to cover and maintenance bills to pay. Having tenants in for a month or two makes these costs easier to meet.
Landlords will also find that the brevity of short-term lets means that they are not committed to a tenant they don’t consider to be the right fit. Maybe they are noisy or messy and would have been bad news long-term. With a short-term let, when the time is up, your tenants will move on.
Where are short-term rentals successful?
The success levels of short-term rentals vary, depending on the property's location. Rural areas are unlikely to be as successful, as there are fewer employment opportunities and, therefore, fewer short-term contractors and fewer people migrating. There will still be some calls, as tenants may need space during their house renovations or when they are between homes, but the demand is likely to be much lower.
It is common for an individual to find a job before they find accommodation, and they will need a short-term base until they find somewhere new. It is also becoming increasingly common for tenants to struggle to find a new property when their contract ends. This is particularly true for young people and students who look to move annually. Properties that ease the worry of not finding somewhere before the end of the contract will be popular, as well as helpful for those affected by the crisis.
Short-term let's aren’t right for all property owners, but when there is a property sitting empty, it is always better to get someone in and some cash flow rather than leave it unused.
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