Long Lets: How Coronavirus is impacting the short lets market
Over the last week there has been a spike in interest from holiday and short-lets landlords who are now considering longer term lettings. Most of these enquiries centre around concerns over short-term loss of income due to the impact of Coronavirus on the global tourism industry. Many Airbnb hosts are now considering their options to ensure they sustain an ongoing income from their property to help ensure they are able to meet their long-term financial goals.
Whilst we have great expertise in short and long lets, we obviously don’t have a crystal ball to know when the holiday lettings market will recover. Nor can we unequivocally say to landlords it is the right time to switch from short/holiday lets to long lets. But for anyone who is considering making the change or needs more information, we’ve provided some of the pros of long-term lettings to help.
Minimal void periods
The average tenancy duration for Rettie & Co. properties is 19 months. Pair this with the average time to let in Edinburgh of 28 days, and long term lets become a very attractive option for landlords facing potentially extended periods of their property lying empty. Minimal voids lead to a steady and consistent cashflow, which can lead to good capital growth on the asset if this income is used to pay towards the mortgage.
The cost of long-term lets are markedly lower since the responsibility for costs of running the property (council tax, utility bills etc) sits with the tenant. Lower letting agency fees can generally be expected too and without regular changeovers, ongoing costs are kept to a minimum.
Long term average rents, may on the face of it appear lower than headline gross receipts from Airbnb, but when lower voids; much lower management costs; turnover expenses, council tax and other costs are taken in to account, the gap narrows markedly.
When combined with the distinct threat of legislative restrictions coming down the track, establishing a firm foothold in the long term market with an accredited agent able to take care of all the regulatory aspects may well be a financially sensible decision.
There are a few compliance related boxes that must be ticked, some of which apply to both long term and short lets and their landlords. This includes securing a Landlord Registration and Energy Performance Certificate ahead of going live on property portals.
There are also five compliance certificates that need to be in place before a tenancy commences. and there are two annual certificates (LGSC & PAT) . Your letting agent can help get these things in place for you; this is why it’s vital to choose a trusted, agent who has joined the Register of Letting Agents (link) and is a member of a professional body, such as ARLA Propertymark (link).
Rettie & Co. is also registered with and audited by the RICS providing an added layer of comfort and protection to owners and tenants alike.
Despite the “lock down” Rettie & Co.s lettings team remains at optimum strength and ready to assist in any way we can. Our experienced Potfolio Managers are responsible for every aspect of managing your property; You get a single point of contact from fixing a leaking tap to negotiating the rent.
Get in touch with us today to discuss your options