Short term vs long term lets
When purchasing an investment property, you may be wondering whether utilising short-term or long-term lets will make a better return on your investment. In our helpful guide, we discuss in-depth the pros and cons of both approaches to help you make the best decision that will benefit your property investment.
Long-term lets
The benefits
Long-term lets usually last a year or longer and are utilised by many tenants who desire stability to establish themselves in a location permanently. For landlords, long-term lets offer a stable source of income and security – contracts for long-term lets are more rigid so your vacancy rate will last the whole duration of the agreed contract. This means you will likely not have to worry about tenants moving before the agreed time. Long-term lets generally also offer good protection against declining market rents in some instances.
The disadvantages
However, long-term contracts also come with their share of downsides. Though you may be tempted by guaranteed income, having a fixed contract also means you may not be able to maximise profits, as you could be missing out on rising market rents. On top of this, long-term landlords also deal with a lot of paperwork and regulations – from the Energy Performance Certificate to the security deposit scheme, it’s likely you may have a lot to deal with.
Short-term lets
The benefits
Short-term lets, on the other hand, are perhaps seen as a riskier investment, as there is no guaranteed income – however, they are becoming increasingly popular for many reasons. Tenants tend to seek out short-term lets for many reasons:
- Flexibility in their living arrangements
- People on a temporary visa who are just visiting for a period of time
- People who are waiting for their property to be renovated or sold
- Moving around the country for different work projects
Due to the limited time of the contract, you can charge higher prices than you would a long-term let. This is especially ideal if your property is in a sought-after location, as you could make the most of tourists visiting these locations – leading to some landlords being able to make one month’s rent in one week. You also have the flexibility to alter your prices if an event is taking place, or if it’s peak season for your property’s location.
The disadvantages – solved
However, short-term lets are known to be more management intensive – but this problem is easily solved with help from SevenLiving. Our property management services eliminate time-consuming tasks, such as managing listings, guest communication, cleaning and changeovers, as these details are taken care of by our team of experts. We handle all enquires and manage your short-term rental admin – from application to completion. We also help with other aspects, such as providing a 100% turn-key experience and facilitating a 24-hour-check-in. To find out more, simply contact our helpful team today.