The impact of COVID – 19 is showing its effects, as the lettings market quickly restructures with landlords who had been active in the Short Term Let Sector, ultimately experiencing demand, and revenue, completely drop off. With regulation of the Short Term Let sector set for 2021, the outbreak of the Coronavirus has made an initial consideration, turn into a major concern. Recently, Lomond Lettings have been advising many landlords on moving their Short Terms Lets, to Long Term Rental, as they reappraise a quick change of strategy.
Long Term Pros
Steady rental income – long-term tenancies bring in regular and steady income every month. Slow and steady wins the race, as they say.
One of the key aspects of being a successful landlord is having positive cashflow, and long-term tenancies generally aid in providing that.
Relatively passive income – compared to managing short-lets, long-let tenancies are a stroll in the park. From my experience, good tenants pay rent on time, but more importantly, they treat their rental accommodation with respect.
Legal requirements – Strict safety and legal requirements makes for a far more regulated sector, and ultimately peace of mind that your asset is a safe environment for its occupants.
Short Term Cons
Time & effort – The time and effort required to manage short-term lets is substantially higher compared to long-term lets. The very nature of short-let tenancies is dealing with a continuous flow of new guests, and as a result much more preparation is required, which includes end of tenancy cleaning, general servicing and checking guests in and out.
Repairs & maintenance – damage, wear and tear and maintenance costs are generally higher with short-term lets because of the high guest turnover. Also, short-term occupants are less likely to treat the property like a “home”.
Vacant periods – while short-lets bring flexibility, they also bring uncertainty; void periods can be normal and regular, and your property will make no return during those periods.
Extra costs – the landlord/host will need to cover costs that are normally covered by long-term tenants, such as utility bills, internet, TV licence and council tax. Essentially, there are far more expenses to track.
If you are affected by this situation and require further advice, please email direct to stephen@lomondproperty.com
