Long-term vs short-term rental: Benefits and the drawbacks
Many people are earning a decent passive income by renting out their investment properties and holiday homes on short-term let platforms like Airbnb. However, before rushing to upload a listing, consider the pros and cons of short and long-term lets.
Short-term rentals: the benefits
Profit: According to recent statistics, short-term lets can earn homeowners 60% higher profits than long-term lets. A property earning £1,000 as a long-term let could potentially earn three times that amount as a short-term let. Just look at the nightly rates on platforms like Airbnb to see the potential earnings.
Keeping life interesting: If you enjoy meeting travellers from around the world, short-term lets can be rewarding. You’ll meet a range of interesting guests and share experiences that could enhance your life.
Flexibility: Short-term lets offer flexibility. As the property owner, you control when and for how long you rent out your space. If your situation changes, you can take the listing down or move into the property yourself. Want to use your Airbnb for a family holiday over the summer? Simply block out those dates in your calendar. This flexibility isn’t possible with long-term lets.
Short-term rentals: the drawbacks
Being on call: Renting your place as a short let means being available to meet guests and respond to their messages 24/7. Listing your holiday home on websites like Airbnb can lead to many emails and questions from guests. Delayed responses can harm your ratings and visibility on the site.
Constant cleaning: New guests arriving each week means lots of cleaning. Regular washing of towels and bed linen is necessary. If household chores aren’t your thing, you could hire professionals to handle this, but be sure to set an appropriate cleaning fee to cover costs.
Trust: Trusting strangers with your space is harder than trusting a long-term tenant who has undergone many reference checks. While platforms like Airbnb maintain a high level of trust between guests and hosts, you need to be comfortable with welcoming strangers into your home.
Marketing required: Short-term lets need to be promoted to new audiences due to the high turnover of guests. You’ll need to keep your listing visible on platforms like HomeAway and Airbnb, and use other online marketing and social media tools to attract guests.
Legal issues: In certain places like London, regulations may restrict property owners from renting out their place as a short let for more than 90 days. Always check the local regulations in your city to avoid fines or legal hassles.
Long-term rentals: the benefits
Peace of mind: With long-term tenants, you don’t have to worry about continually marketing your property. You can relax, knowing that the property will be occupied for an extended period. This requires much less effort than managing a short-term let.
Guaranteed income: While short-term lets can be more profitable, there’s no guarantee of maximising occupancy rates. Long-term tenants provide a guaranteed income for the duration of the rental agreement.
Invested tenants: Long-term tenants are more likely to take care of your property, knowing they will be living there for at least six months. They usually want to maintain the property to a high standard.
Long-term rentals: the drawbacks
Locked in: Life can be unpredictable, and being locked into a 12-month contract with a tenant may not be ideal if your circumstances change. Long-term lets don’t offer the flexibility to change occupancy or invite friends to stay.
Giving up control: With short-term rentals, you can enter the property once guests leave to perform maintenance and cleaning. With long-term tenants, you relinquish some control and must rely on tenants to maintain the property.
The alternative: mid-term rentals
Mid-term rentals offer a middle ground, combining the earning potential of short-term rentals with the stability of long-term ones. They’re ideal for those seeking more income without the constant turnover of short-term lets.
This option appeals to guests needing a place for a few months, providing a steady income for owners and reducing the hassle of frequent changes. It’s a flexible choice, balancing higher earnings with fewer tenant swaps.
GuestReady mid-term rental management
GuestReady now offers mid-term rental management services. We handle everything from listing optimisation to guest communication and property maintenance, ensuring you get the best returns with minimal effort. Let us help you manage your property efficiently and enjoy a hassle-free rental experience.
Calculate your potential short-term rental income
Before deciding, use our free online short-term rental calculator to estimate your property’s income potential. You might be surprised by how much you can charge per night. For further advice about your earning potential, contact GuestReady.
We can help take the hassle out of running a short-term let, allowing you to enjoy a steady income.
