Letting property on a short term basis, or as a holiday home, is proving profitable thanks to the rise of short term rental platforms such as Airbnb, and changes to taxes for buy to let property.
With many landlords considering short-term rentals a hassle compared to longer-term lets, there has been an increase in the number of services which are available to help make letting property much easier. For example, short term let management has made the rental process for short term lets a breeze for landlords, with all aspects of letting the home taken care of by a property professional.
A whole range of services now aim to address the concerns of landlords who want to let on a short term basis, and these have taken the traditional short-term let management or holiday concept and given them a digital, modern twist which also aims to reduce costs. Names such as City Relay have become big players in the market, helping London homeowners let their property. This platform arranges all aspects of letting property including advertising on sites including Airbnb, help with maintenance, cleaning and other services.
Short term let management companies can also provide support to guests around the clock, and take much of the burden from landlords. At peak times during the year, holiday accommodation can be rented out for up to 85 per cent of the time.
Each property management firm will charge their own fees, but landlords will be responsible for utilities and all household bills, as well as taking and checking inventory reports. Inventory reports can be created to a professional standard using a company which specialises in inventories.
For landlords who choose to let their property directly and forgo hiring an agent or short-term let management firm, there are many platforms available such as Airbnb. These sites allow landlords and homeowners to advertise their rental properties, communicate with potential guests and manage bookings.
Landlords who choose to go to Airbnb directly will have to pay its service charge, and hosts will have to load their listing directly onto the site. Guests will also pay a service charge to Airbnb. If using a property management company, a firm will charge a commission to the homeowner, which will also cover the work that they carry out in managing and looking after the property.
Other sites for third party booking such as Booking.com or HomeAway will use a different fee structure. Some hosts prefer to manage bookings and the property themselves, while others pay more for an easy life.
In addition to this, interest relief against the income tax charged on long term buy-to-let property rent is currently in the process of being abolished and will be replaced with a tax credit for paid interest at a maximum of 20 per cent. Relief for landlords for wear and tear has also been pared back by the government.
However, furnished holiday homes are still able to benefit from favourable tax treatment, and are regarded as trade by HMRC. This means that interest relief for the full mortgage is still available. Insurance for short-term rentals also ensures that properties are protected from damage by short-term guests.
Some management companies also provide reception spaces, which are commonplace in major cities such as London. The location generally dictates how much money you can charge guests to stay at your property. Homes which are located near rural areas with access to main towns or cities, conservation or national park areas, or near the coast, are particularly popular with short-term guests.
Unique accommodation such as cottages, Art Deco decor, log cabins and barn conversions can also demand higher rental prices and good profits for short stays.
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