Short-term letting opportunities, such as the Airbnb model, have been slowly becoming a popular model for investors to follow, particularly in larger tourist hubs such as London, Liverpool and Birmingham. With typically higher returns than long-term residential opportunities, short-term lets can bring savvy investors returns of up to 30% - however is it really worth it with all the additional costs and management that goes along with owning this type of investment property?
A study from Technavio recently predicted that by 2021 the global vacation rental market will grow more than 7% annually to eventually be worth over $194 billion.
With the ability to offer a more affordable ay of vacationing - especially for groups - more and more people each year are choosing to stay in serviced apartments of holiday homes than ever. The ability to interact with other travellers and have a real 'home-away-from-home' feel has become a more important factor for many discerning travellers, especially in the UK, over the past few years.
Many investors choose short-term let opportunities over the more traditional long-term residential options due to the high yields that can be achieved from these types of investments; with many short-term lets asking much more per week than the average residential rent. This, however, is due to the expectations from customers who are looking for the provision of a hotel but in a fully serviced accommodation that's more than one room. This does come with costs, such as additional cleaning costs, the cost of bills, and being able to over void periods; however, with the right plan in place and savvy investment decisions, short-term lets can become much more lucrative the residential long-term let opportunities.
Short-term lets are also a great way to diversify your portfolio, which can help to insulate your asset profits through lull periods each sector experiences. Additionally, the income you can achieve from short-term lets - as long as you are able to achieve an occupancy rate above 60% - could be able to cover the cost of the mortgage on multiple assets should some not be performing well for a time.
There has also never been a better time to be in short-term lets, with the age of technology making it easier than ever to advertise your apartments or house online to the mass market. Hosting sites such as Airbnb offer landlords access to millions of vacationers globally, which has seen this type of let grow in both popularity for tenants, and in profitability for landlords over the past decade.
Another benefit to short-term lets is also the flexibility that landlords are given. You are able to stop bookings being made on your apartment or house when you would like to have it free, or use it for a personal vacation, and you are also able to be more selective with the tenants you have. This is especially true for letting opportunities in popular cities such as Liverpool where demand is drastically outstripping supply.
Thinking of investing in a short-term let opportunity? Give our sales team a call on 0161 3026732 to discuss our current opportunities and how a short-term let apartment could fit into your portfolio.