It used to be that super short rentals, or even rentals shorter than a year, were not worth it to landlords. Just finding a good tenant is hard enough, let alone finding many across a year that inevitably provides paper-thin margins with a lot more work involved. But with the rise in popularity of “DIY Hospitality” services like Airbnb and Homeaway means that super short stay rentals, available quickly through an app and online, could mean a dramatic change in the letting market.
Where’s the Value for Landlords?
The effort may seem like it won’t be worth it for the competitive rent you’ll be offering for your property. However, online marketplaces that list properties for sale have now made short-term renting as simple and easy as booking a hotel. Because of this, travellers and tourists are likely to choose a house-share or home-stay as their holiday option above a traditional hotel – often these are more convenient for the travellers (being closer to city centres) and generally cheaper than a hotel stay. Where landlords profit is offering competitive, but profit-creating nightly rates, cleaning the property themselves, and finding a way to handle key exchanges.
You can take advantage even if you live at the property
There are no rules saying that properties must be empty to be used by potentially short-stay renters. In fact, it’s expected and almost encouraged. Much like Uber and ride-sharing, the idea behind Airbnb is if you have a spare room, you can rent it out. This is how many people living in city centres can profit from their own properties, becoming part of the £3billion of revenue from peer-to-peer platforms last year. Monetising any available capacity in your property is key, even down to car parking spaces and storage units.
Be wary of tenancy agreements and breaches
As a landlord, you’re more than within your rights to let out your properties for super-short stay rentals. It may get trickier if you have a two-bed property with one long-term tenant and you want to let the other bed out for profit via Airbnb. Another issue that follows the Airbnb platform is the unfortunate fact that many properties are being illegally sublet by tenants without the landlord’s consent, meaning they’re essentially monetising something which isn’t’ theirs to monetise. Be aware of breaches if you want to go down the road of peer-to-peer rentals, it’s a two-way street and could end you up in hot water unless you do it right.
It’s a numbers game
At a fairly basic level, to profit properly from Airbnb and super short-stay rentals, you have to change from just ‘landlord’ to someone within the hospitality industry. Knowing the technology and operational requirements behind advertising your property, gaining reviews (and therefore more renters), cleaning, key swaps, agreements – it’s all logistics. There are a lot of moving parts to this, but it could mean that you’re profiting more, and finding it easier to fill your property. You may not hit a 100% “fill rate” like you would with a year-long tenant, but the problems could be fewer, and the profit higher.
Thinking of taking on a short stay rental? We’re here to help: contact iLet today and let one of our experienced Lettings Agents help you find the perfect new rental property.