In This Guide
Administration
Being a landlord
Buy to let investment
Choosing the property
Finding tenants
Letting property
1. Buy to let
2. Residential property investment
3. Why buy to let?
4. Letting your own home
5. Let to buy
6. Short term lets
7. Rent a room
8. Property investment services
Lettings agents
Levels of service
Preparing the property
Problem tenants
Tenancy
Letting property
Short term lets
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Short-term letting is another option which many landlords and homeowners don't always consider, but it is one which provides a useful source of income for some property owners.
Short term lets are particularly popular with homeowners whose
work involves them being out of the country for several months
of the year. Rather than leave the place empty and risk burglary
or insurance invalidation, a short let is arranged to put a tenant
in the property for some or all of the vacant period.
Some people find it difficult to sell their property at the price they really want to achieve, yet need to move for one reason or another. Rather than accept a lower price than is sought, or leave an unsold property empty (which isn't going to help the value at all), some people opt for a short let.
Letting for a period of 3 months can cover the costs of keeping the property whilst your agent tries to sell it. It covers the cost of your mortgage and certainly helps the appearance of the property. You'll still normally have to pay the council tax, as that is normally included in the rental price for the tenant. The rent also normally includes all other bills except the telephone. But you'll have less security worries and a short let helps maintain your household insurance policy (assuming letting is permitted), as some policies only allow a certain period of vacancy before the policy lapses.
But here's the real plus point. Short term lets can provide a lucrative source of extra income as they can generate anything from 15 to 50 percent more than rental prices under an assured shorthold tenancy. For this reason, some landlords actually prefer to let short term, hoping to find a series of tenants for a property, doing their utmost to minimise empty periods. This strategy can work for some properties in some areas, but it is risky, as your property has a good chance of lying empty between lets.
Most short lets are catering for holidays or business people working
in this country on a short term basis. Business professionals
are the ideal tenants for most people. Companies are often willing
to pay handsomely for high quality properties in the right locations,
as the alternative is hotel accommodation - usually much more
expensive for an equivalent standard of accommodation. Some companies
can even afford to supply cleaning, laundry, chauffeur and catering
services for the tenants they are placing, due to the savings
that they make over hotel accommodation.
With the exception of holiday homes, where certain other factors
come into play, high class exclusive homes dominate the short
term letting market, with both flats and houses being popular.
Not only are they generally high quality properties in upmarket
areas, but the most successful are also presented with an attractive
décor and furnished to a high standard. However, if your property
does not fit this bill, it does not mean you won't be able to
find a short term tenant. Excellent location, proximity to useful
transport links, pleasant grounds or some other appeal can make
your home attractive to certain tenants.
It is quite easy to find lettings agents that deal with short
term lets, as long as your property is in London. Unfortunately,
agents dealing in short term lets are not as easy to find outside
of the capital. It may be slightly easier in areas that are popular
all year round tourist destinations and areas that are close to
the headquarters of large multinational companies. These will
generally work through one or two preferred agents, so if you
can find out who, that would be a pretty good starting point.
Other lettings agents that do not normally specialise in this area may also be happy to take on your property. Bear in mind that even specialists in short term lets will usually charge anything up to twice as much for letting and managing a property on a short term basis compared to a property under a standard agreement.
- If yours is an expensive home, get a professional inventory done. Make sure it is thoroughly detailed. You can reuse it when you renew your household insurance cover.
- You sign a legally binding licence agreement that allows you to regain possession of your home should the tenant decide that they like it a bit much.
- Take a large deposit from the tenant to cover any damage.
- Tell your mortgage lender and household insurance provider what you are doing, there may be an extra premium involved.
- You now your responsibilities. Even with a short term let, you still have much the same obligations as a normal landlord, as regards fire safety, gas appliances and so on.
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