Landlords: short-term vs long-term lets

2015-05-07 06:00

SHORT-TERM tenants generally won’t be moving furniture in and out, painting the walls or changing the carpets, so the property should need less heavy-duty maintenance.

Tax advantages

If you let your property short-term, you may well have more advertising, cleaning and management costs to deduct from your rental income.

However, you will need to seek professional financial advice in this regard.

Flexibility

If your property is in a holiday town, for example, letting it out on short-term arrangements during peak months will probably mean that you can afford to use it yourself for at least a few weeks a year.

Fewer tenant clashes

Letting short-term will reduce the likelihood of having to deal with troublemakers, hoarders and defaulters, especially if you have a good managing agent.

But short-term letting is definitely not all wine and roses.

Investors could find, for example, that the body corporate­ or homeowners’ association of the complex or estate where they own an investment property is quite happy for them to let it long-term, but has a rule against short-term letting.

Other negatives to look out for are:

Fly-by-nights

It is important to find out why prospective tenants want a short-term rather than a long-term lease, and if there are any employment or financial issues that make it more likely that they will default.

Additional costs

Short-term tenants usually won’t pay for municipal services such as water and electricity, furniture, appliances or linen, so you will need to budget for these, as well as regular cleaning and restocking.

Turnover management

It takes time and energy to look for a new tenant every­ few weeks or months, and to make sure every time that the property is clean, inventoried and ready for the next tenant.

This is where the help of a managing agent experienced in this market can make all the difference between profit and loss.

– Property24

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