We are going to share with you the differences between short, mid and long term let. Weighing up the pros and cons of each one.
So, what is a long term let?
A long term let means that homeowners and letting agents must comply with a comprehensive set of legal obligations. This makes sure that the property is 100% adhering to specific standards in order to keep its tenants safe.
How long is a long term let?
It will usually be anywhere from a year upwards.
A long term let is a way that a landlord or landlady can quite simply rent out their property for long periods at a time. This can give them peace of mind and guarantee a fixed monthly income.
The stability that this creates for some landlords is beneficial especially if they have multiple properties. It really can make life much simpler especially if they are managing a lot of different properties with many tenants. Another benefit is that rental income is predictable and easy to calculate with a fixed agreed income. Especially true if there are mortgages or other outgoings that need to be paid.
It is one big headache taken away from them for the entire duration of the tenancy.
The cons are a little bit like the opposite of the pros mentioned above. If the tenants are less than ideal, then the landlord is stuck with them. If the tenants fall behind in rent arrears and the landlord is relying on their rent money to pay their own monthly mortgage, then this can be an issue. It can begin to create unsustainable financial problems and headaches for the landlord.
If an increase in rental value of properties occurs, a landlord would be unable to swiftly take advantage of it. There are clauses for grounds of eviction that can be used with the help of a solicitor in extreme cases. But this is no easy fix. It not only costs the landlord to instruct the use of a solicitor, whose prices are exorbitant. But it also tends to be a long and drawn out process to remove said tenants.
Another problem that long term lets can present is the use of the property’s amenities. For example, over long periods heating water electric and carpets can reduce their wear and tear. Inevitably leading to some repairs. But in a short term let there it is less likely that repairs will need to be done.
What is a short term let?
A short term let is an agreement that generally is less than six months. They are usually booking via short let platforms (Airbnb, Booking.com etc.). In a lot of cases, the occupants or guests can be holiday-makers, tourists or work-related businesspeople. As short lets make a great alternative to a hotel, people snap them up quickly. They have become a very trendy little earner especially if you have a spare room.
The first thing in favour of this type of let is you can charge a much higher rent.
Short lets are charged by the night and can yield on average 30% higher returns versus a long term let. Sometimes even more especially in high season.
The landlord has more flexibility with their property as they can choose to use it for themselves when it’s vacant. If a landlord is unlucky enough to have bad tenants they will be leaving as quick as they came.
There is a lot more work and effort involved in a short term let. The fact that there is a constant flow of tenants or guests, means that you will need to be undertaking a lot of cleaning and preparing. Also, checking guests in and out and any damages or repairs usually have to be quickly fixed.
Short term rentals in London are currently subject to the 90-day rule. The lengths of stay can range between one night up to a couple of weeks. You might also find you have unexpected vacant periods. On top of that you will be responsible for paying any bills and utilities.
Mid term let: the alternative to avoid restrictions?
A mid-term let is an alternative tenancy agreement that lasts anywhere between three to eight months. This is ideal for those looking for a let with for a specific period of time.
The positives with this type of let is that you can charge more per night than a long term let. You also have the added advantage of it being professional in mobility for things such as business contracts or refurbishing the home.
As the tenants are staying for a pre-agreed period, the risk is fairly minimal for failure to pay rent. This is also true for failure to leave at the end of the term. As the tenancy is an “out of season let” there are fewer formalities when proceeding with termination of the contract.
The one drawback to this type of let is that there is less demand from tenants. This is due to it being more niche , as the majority opt for short or long term let.
Nestify keep the pros and eradicate the cons
By partnering your property and letting needs with Nestify we will manage and combine the best of both worlds for you.
We will successfully let your property with a combination of short term let and mid-term lets. Bingo. Holiday lets in the high season will bring the biggest yields. Nestify will take care of all the hard work such as housekeeping, check-in and check-outs. All preparation, cleaning and more will be taken care of to ensure your guests have a memorable stay.
Throughout the rest of the year Nestify will arrange mid-term lets. This brings much-needed peace of mind with longer periods of secure rental income. Experience all of the benefits by letting Nestify take the reins to manage your property letting needs.