Why offer a property for short-term rent, possibly even week by week, when you could secure a long-term tenant who pays money over many consecutive months? Actually, for a number of possible reasons.
A short-term rental is defined as being less than six months, but many landlords are now making arrangements regularly for as little as one week.
It might suit a landlord if they live in the property themselves, but are away for certain periods on business or holiday.
The scope for tenants will be wider, too – as it might include holidaymakers looking at apartment rentals with all the home comforts, for example, or companies after somewhere for an employee that’s more cost-effective than a hotel.
The approach to short-term rentals will be different to anything long-term, from the way it’s advertised to the tenant’s expectations.
You can find a letting agency to help you – some might even rent your property out by the day for film, TV and photography shoots, if it’s deemed suitable.
With short-term lettings, you can hardly expect tenants to turn up with all of their furniture, or arrange the bills in their name when it’s just for a week or so. For this reason, you’ll be looking to rent your property fully furnished, with all the basics you might expect provided in each room, from beds, sofas and tables to white goods.
It needs to look homely, too, with soft furnishings where applicable – including pillows, duvets and extra sets of bed linen – plus a few homeware essentials, such as a vacuum cleaner and ironing board.
This also means you’re probably going to want to arrange contents insurance as well as the usual buildings cover. Unlike with a long-term let, where the contents insurance will be purchased by the tenant, these aren’t their belongings.
Be sure to build the price of any bills into the overall rent. That includes gas, electricity, water, phone line and Wi-Fi. Some short-term landlords set up the landline to be national calls only, to limit costs there. The washing of bed linen and cleaning should also be factored in.
Next, consider offering additional services, such as laundry and food. The tenant may appreciate groceries awaiting them, and it means you can earn an extra £15 or so per week for a quick supermarket trip.
Prepare the property
A short-term property rental should be no different from any other when it comes to preparing it for a tenant’s arrival. Make sure it’s clean and tidy, and that all appliances and light bulbs are working.
Just as with a long-term rental, all the gas and electrical safety checks and certificates should be in place, smoke alarms and carbon monoxide detectors fitted.
You should still draw up a tenancy agreement for the short-term accommodation and also take a deposit, as the potential damage to your property is never dependent on how long the person is staying.
Maximising the potential
How and when you advertise the property can make a difference in terms of the response and also how much you charge. Peak tourist periods, like the summer or school holidays, can present an opportunity, as can major events – everything from Wimbledon or the FA Cup Final to the Edinburgh Festival Fringe; if your property is nearby, it could be an excuse to cash in.
Planning ahead, scheduling in tenants in advance will prevent the property from remaining vacant. Always be clear when advertising – give the exact dates for availability, then state what is included, such as the bills, laundry and any other services.
Offering a range of payment options can be a good incentive, too – but make sure the funds have cleared before the tenant arrives.
Often it’ll be the smaller details that help you stand out from the crowd in big cities where there’s a lot of competition. So, feature good quality photos and a calendar or list of available dates. Also, meet the tenant personally to hand over the keys and show them around.
Landlords can be flexible on the space available, considering a short-term room rental if the entire property isn’t available. This could work if they are living there too, while allowing tenants to stay.
Reap the benefits
In addition to the flexibility of dates and variety of tenants promised through short-term rentals, another major incentive could be a financial one. From April 2016, the government’s Rent a Room scheme allows landlords to earn up to £7,500 per year tax-free. The Rent a Room scheme relates to letting furnished accommodation in your only or main home.
This means that as long as your income for the short-term rental is under this amount, you’ll remain exempt.
A long-term letting can easily creep over that figure after several months. With careful planning, a landlord could take on just enough short-term rentals to remain under the threshold – meaning the highest possible earnings without paying tax.
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