What are the key differences between self-catering, short term and longer term let properties?

 
Short term
               Longer Term
 
Income
MORE and LESS regular. You can charge more for high season
LESS, but once let is usually regular
 
Expenses
MORE - the owner pays for utilities, council tax, TV license, Wifi, etc. (see preparation)
LESS - the tenant will pay for utilities, council tax, TV License, etc
 
Occupancy
LESS - you are likely to have periods with no-one staying
MORE - Once let, you usually have a 6 month contract
 
Furnishing and Equipment
MORE - you usually provide TV, DVD players and internet access as well as bed linen, towels, etc
LESS - the tenant will normally provide their own services and linen
 
Effort
MORE - the property will need cleaning and laundry doing after each changeover. Each new tenant/guest will need to be provided with keys
LESS - once the tenant is in, there is not usually much support required
 
Risk of damage to property or non-payment
LESS. People staying for short periods don't usually have parties, move furniture around and damage walls. Frequent changeovers mean minor maintenance is addressed regularly. Non-payment is rare as payment is usually taken before people stay in the property
MORE. People staying in a property that is their main home will make changes, hold parties and treat your property with less respect than a guest staying for a short period. There is a risk that people stop paying monthly rent. In which case, it can take some time to evict them
 
Bureaucracy
LESS. Properties are let against terms and conditions and people staying do not have tenant's rights. HMO regulations do not apply.
MORE. You need a lease and your tenants have many more rights than people staying in holiday let properties.
 
Flexibility
MORE - if you want to use your property for some of the time, you simply book it out and use it!
LESS - Once let, you cannot take over your property for your own use within the period of the lease.
 

 

In summary, whilst the set-up costs for short term lets are greater than with longer term lets, the income can be more as well. There can be significant financial advantages in short term lets over longer term lets but only if the occupancy is high enough for the higher income to cover the extra costs. Remember it is appreciably more work to market and manage the property, but choosing to let your property as a Holiday Let allows you the flexibility to have the property for yourself from time to time.

You should also note that currently there is less bureaucracy and risk of damage to your property with a short term let (rather than with a longer term let). This is probably because of a combination of:

  • The owner or manager of the property being present frequently to do changeovers means simple maintenance is being done continually
  • Holiday guests generally spend less time in the property resulting in less ware and tear. 
  • People staying for a short period are unlikely to make any ammendments to the fixtures and fittings 

Short term let properties are usually let with terms and conditions rather than a lease. In long term lets, the tenant is empowered with many rights over your property, their terms and conditions should be drafted to ensure this does not happen in short term lets.