Landlords concerned about tax change could look to short lettings
There are concerns that tax relief changes on buy to let mortgages may leave some UK landlords struggling to maintain their yields.
One possible opportunity is for them to look at is increasing their returns via the short lettings market for holidaymakers and business people.
But for this to be successful landlords need to understand the short lettings market and if they have been used to renting long term they may be unfamiliar with it, according to Alexander Lyakhotskiy, chief executive officer of Pass the Keys, a shot term letting management company.
‘Short lettings appeal to mainly tourists and business travellers looking for a cheaper alternative to a hotel for their trip. Even though it is cheaper for the guest, the property owner is still making more money, specifically up to 50% to 100% more than they would if they let their property long term,’ he explained.
The firm has a revenue forecast calculator that shows how much a landlord could earn for a year if they were to rent a property short term.
According to Lyakhotskiy they also need to consider the location of the property for short term rent and its facilities.
‘Ideal properties for the short term market are ones centrally located in a city with good transport links. City centres always achieve a higher and stable occupancy rate, resulting in a higher income,’ said Lyakhotskiy.
‘When it comes to property size, a one bedroom flat is perfect for a couple on a short trip, or a business traveller, whereas a five bedroom house will appeal to a family on holiday. A sofa bed can add to the price asked and it a popular search word according to Trivago,’ he added.
But he also pointed out that short term letting means more work in terms of cleaning and checking guests in and out more frequently. The most successful short lets are promoted with high quality photographs and guests usually require towels and linen to be provided. They may also require 24 hour support.
The company prepares professional property listings, replies to guest requests, provides 24/7 guest support, and arranges cleaning after each guests’ stay. The service aims to let landlords take advantage of the extra income from short letting without the extra hassle.