As a landlord you will need to carefully think about what strategy suits you and your property. Many landlords love the high rents that short term lettings generate, but they may not be aware of the extra work involved.
Long term tenancies are lets over six months, whereas short term lets can range from a number of day or weeks up to six months. The general rule of thumb is the shorter the letting the higher the rent which appears to be a more lucrative investment.
However, there are a number of things you should consider with short letting lettings before choosing this option.
1. Is it permitted?
First and foremost, are you allowed to rent your property on a short term basis? Online portals such as Airbnb have become increasingly popular over the years for both consumers and for property owners.
The result is that some countries are clamping down on short term lettings so as not to negatively impact the hotel industry, whereas in other countries the legality is still a grey area. It is advised that you check the press for recent news stories to get updated information on the situation to see what your options are.
In Thailand for example if your condominium does not permit short term lettings then you must abide by these rules. Singapore, on the other hand, has placed a blanket law not allowing lettings under six months.
2. Amount of furnishings.
A short term let offers convenience for the renter. Therefore, everything needs to be provided down to bedding, towels and teaspoons. The occupant is going to want to turn up just with their suitcase in hand but still enjoy hotel like luxuries. These extra furnishings add to expenses, and you will need to bear the cost of replacing these too.
3. All inclusive.
Short term rents are inclusive of all utilities such as electricity and Internet. This is one reason for their marked up rent as you will need to estimate how much an occupier will use. Internet packages tend to be a set amount regardless of usage so this is easy, but electricity and water are charged based on usage. Occupiers who aren’t liable for these costs tend to be less conscience of how much they consume and might leave the air-conditioning and lights on when they are not at home.
4. Void periods.
Long lettings are less susceptible to void periods than short term lettings as there are fewer changes of tenants. Between tenancies there will be gaps dictated by demand and also to get the property ready for the next tenant. During this period no rent will be generated, so you might find over the course of a year the same total rent is generated for a short let than a longer let with no voids.
5. Additional costs.
Cleaning in between tenancies, lettings fees and the cost of someone to welcome tenants for short term tenancies are all additional costs that short term tenancies incur. These are also labour intensive and are another reason some landlords shy away from short term lettings.
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