The short-term rental market may be tempting at first glance, but what exactly are the pros & cons of getting into short-term letting as opposed to the more reliable long-term market?
What Is A Short-Term Let?
A short-term let is usually an agreement covering any length of time up to 6 months. They are used in many situations, for example, people needing somewhere to stay for a long holiday, temporary accommodation while renovations are being carried out on people’s homes, workers on temporary contracts away from home or potential buyers researching an area before investing there.
Pros
The greatest benefit of short-term letting for landlords is the ability to increase rent far more often than their long-term counterparts. Each time the property is let, the price can be increased in line with the current market.
Along with the ability to increase the rent often, you can also change the terms more regularly. This can be particularly useful in instances where something has been overlooked and needs to be added. Instead of having to wait a year or more, this can be dealt with swiftly.
Wear & Tear tends to be significantly less prevalent in short-term lettings. This is due to a number of factors, but mainly due to the fact that tenants tend to spend much less time indoors than long-term renters. A short-term let also offers the ability to inspect the property more often and tend to any small issues that if left unchecked over the course of a long-term rental, may spiral into costly problems. By saving money here, you are again increasing your yield over the comparatively long-term option.
Another benefit of short-term letting is the ability to use the property yourself more often if needs or wants be. Letting on a week-to-week basis will free up the property often and allow you to use the property as well as reaping the benefits of a rental income.
Even if your property is usually on the long-term market, briefly swapping over to a short-term model can help fill those gaps between long-term tenants.
Cons
So we’ve looked at some of the benefits of the short-term rental model, but what about the negatives?
There are a few things to consider when entering the short-term market. For example, advertising. Rather than advertising your property briefly while you find new tenants, your short-term rental will need to be constantly advertised if aiming for the week-to-week, or even month-to-month market.
Other things to consider include regular cleaning bills, as after each tenant has departed, the property will need to be thoroughly cleaned. Perhaps you will need cleaning even while tenants are there, depending on your services and terms offered.
Another more obvious factor is the unpredictability of the market. Particularly in the current Covid-19 era, the short-term market may be affected in ways we have seen over the last 18 months where numbers were massively down on previous years due to restrictions on travel. This can always happen again, unfortunately, so compared to the reliability of a long-term rental, short-term rentals can certainly have their drawbacks.
At the end of the day, short-term letting can have amazing benefits if you are willing to put the work in and may even change the way you think about the rental market going forward.
What To Do Next?
If you are a landlord looking at the short-term rental market and are in need of advice, then you should look at a reliable property management company that can advise you and provide a host of services including advertising, tenant screening, rent collections, cleaning & maintenance and much more. KPM Group has been providing property management services in Ireland for over 20 years and has clients all over the country. Get in touch today and a member of staff will be happy to help in any way we can.
