Top 5 Tips for Finding a Great Short-Term Rental Properties
Short-term rental properties are seeing a resurgence after last year’s lockdowns and regulations limited our ability to travel. As interest in the market picks up, we are seeing trends like hybrid and remote working create a shift in demand for sought-after amenities and properties.
More than ever, people are looking for the chance to get away from it all for longer periods. As well as in locations close to nature. While still a competitive market, there are plenty of opportunities in the short-term rental market. Especially for those who pick the right property in the right location.
Here are some tips for finding short-term rental properties in the UK. As well as, reasons why a short-term let could be a great investment in 2022 and beyond.
What are Short-Term Rental Properties?
A short-term rental is usually a property that is offered on the market for six months or less. Short-term rentals UK can include holiday lets, vacation homes or simply someone wanting to rent a property for under a year.
What are the Benefits of Short-Term Rentals?
One of the main benefits of short-term rentals is the financial reward. When demand peaks, landlords can charge higher rates and enjoy higher margins. During busy windows like school holidays, short-term rentals can be particularly lucrative. In addition, short-stay tenants (for example, those staying around a month) expect to pay a slight premium. As they are looking for the flexibility that comes with renting on a short-term basis.
Secondly, short-term rentals give landlords the flexibility to enjoy the property throughout the year. Landlords can simply block out the dates they wish to use the property and open it up for the rest of the year to cover the property’s costs.
What is the Size of the UK Short-Term Rental Market?
Airbnb data showed a 33% increase in listings in the UK between 2017 and 2018, from 168,000 to 223,000. The short-term rental market size took a hit during the pandemic. This created a lull in demand for short-term rentals. Nevertheless, interest in short-term lets is bouncing back due to a shift in lifestyles and living situations. The short-term rental industry is still lucrative and could be one of the best types of properties to invest in in 2022.
Changes in Lifestyle are Spurring Demand for Short-Term Property
As the world undergoes a revolution in how we live and work, more people are combining work with travel. This is having a significant impact on the demand for short-term rental properties. Here are some of the main trends affecting this market:
- Changes in Work Habits
In 2022, with remote work becoming increasingly common, we see more people opting to spend part of their time working away. Short-term letting is a way for people to combine work with travel and exploration. But only for a short period of time. “Bleisure” is the concept of blending work with pleasure. And it will continue to spur demand for holiday lets as remote working trends are here to stay.
- A New Demographic of Renter
Vacation homes and short-term rental properties used to be primarily in demand from vacationing families. Although now, with work-from-home becoming work-from-anywhere, remote and hybrid workers are booking more vacation homes. Especially now that they are no longer tethered to the office. This new demographic has specific demands for the type of property and amenities. Owners of short-term homes need to pay attention to them.
- Outdoor Escapes
With lockdowns spanning the better part of almost two years, we see more travellers focusing on short-term lets in rural locations or areas of natural beauty. The return to nature is boosting demand for short-term rentals and vacation properties close to national parks or the coast.
- Longer stays
Whether families, business travellers, digital nomads or vacationers, the average number of nights people are choosing to take in holiday lets is increasing. Many booking platforms like Airbnb are seeing travellers stay for 28 days or longer. These short-term working holidays or sabbaticals are a reflection of remote working trends.
- Return to Cities
Short-term rental properties in cities experienced a steep decline in bookings since the start of the pandemic. While there is a growing preference for rural areas, travellers are steadily starting to come back to the city which is somewhat fueling a recovery.
While there is a slight shift out of places like London to the coast or the UK’s national parks, as international tourism continues to pick up we expect to see cities regain their popularity amongst international short-term renters.
5 Tips for Finding a Great Short-Term Rental Property
Understanding the geographic preferences, demand for amenities and changing lifestyles of tenants looking for short-term lets will be key to finding a profitable rental property. If you’re looking for short-term rental secrets, here are 5 tips for finding a great rental property to ensure it is a success:
- Understand your Target Market
Remote work is causing a shift in demand for short-term lets. While traditional tenants like families or couples renting for the short-term still exist, landlords would do well to focus on new tenant demographics that can make their short-term rental property more profitable.
Millennials are one of the driving forces of the short-term rental market. Guests between 24 and 36 years of age are increasingly working remotely or in a hybrid model and wanting to combine work and travel. Satisfying this type of tenant may mean landlords need to change their strategy in what they offer and how they offer it.
Millennials are looking for affordability, expect good customer service and anticipate immediate support. They come to explore the area but also place priority on being comfortable. With the short-rental market becoming increasingly saturated, landlords need to ensure their property is up to scratch and deliver excellent customer service to attract this market.
- Consider Creative Lets
Demand for unique properties that offer something a little different can be a major draw for the short-term rental market. From unique architectural designs to glamping to treehouse stays, renters are looking for homes that feel like an adventure.
Landlords that can add amenities or features to help their booking stand out from the crowd can help their property become more profitable. Whether it’s something as simple as a hot tub or more complex like a container home, unique properties will catch the eye of short-term renters.
- Essential Amenities
The pandemic fueled the adoption of contactless check-in. While many guests still appreciate the human connection, many are happy to have the flexibility of arrival time and coming and going as they please. Smart locks and other technologies that allow guests to check in via remotely are firmly part of guest expectations.
Guests want the benefits of in-person contact without necessarily needing human interaction, so things like digital guidebooks and keyless entry will become increasingly sought-after. Rocket-fast wifi is another non-negotiable for today’s short-term renter. While many come to a vacation rental to get away from it all, they still want to keep in touch. What’s more, with remote and hybrid workers becoming a key rental demographic for short-term rentals, fast and reliable wifi will be a deal breaker.
The UK offers something for all types of traveller. Properties in historic cities or those close to the coast or near national parks. These are some of the most sought-after locations that can help landlords boost rental yields.
Some of the hottest locations for short-term rental properties right now include the historic city of York. Holidayers are drawn to the North Yorkshire city. This is thanks to its proximity to nature, charming cobbled streets, cool cafes and restaurants.
Coastal towns continue to be popular destinations for UK getaways, with visitor numbers peaking in the summer months and over school holidays. Bournemouth has some of the warmest seas in the UK and soared in popularity over the summer of 2022 as temperatures skyrocketed. With numerous beaches and the appeal of the Jurassic Coast, the Dorset town is becoming an attractive destination for short-term lets. Other locations like Newquay in Cornwall also remain popular. Easily accessible from London, with activities like surfing and well-cared-for beaches, more short-term renters are looking to escape to the Cornish coast.
- Be Aware of Changing Regulations
This summer, the UK Government announced the launch of a review into the impact of short-term holiday lets on popular UK tourism destinations. While the holiday and short-term rental market has boomed in recent years and helps to boost tourism across areas of the country, it also has an impact on the availability of housing stock for residents and has seen some concerns emerge around health and safety standards, noise and anti-social behaviour.
While no decisions have been taken, the review aims to better understand the opportunities and challenges. Down the line, we could see more licence schemes established. As well as tighter rental regulations or other measures implemented to tackle issues of second and empty homes to ensure residents aren’t driven out of their communities.
How do I Succeed in Short-Term Rentals?
With the right short-term rental strategy, having a short-term let can be lucrative for landlords. Here are some of the ways you can increase your chances of finding success in what is becoming an increasingly competitive market.
- Hire a Property Manager
If you don’t live near the location of your short-term rental investment or don’t want to deal with a high turnover of guests and the demands of a tenant, hiring a property manager is the way to go.
A property manager can take care of everything related to your short-term rental. From marketing your property to dealing with tenant-related issues. All of that on your behalf to make sure the property is taken care of. Read our article for tips on how to find the right property manager.
- Offer Attractive Amenities
Make sure you are catering to the needs and desires of your guests. Fast wifi, Netflix access, seamless check-in and well-equipped kitchens are a must as tenant demands evolve. Unique features like hot tubs or complementary beach equipment can drive visitor numbers and repeat guests.
- Focus on Getting Positive Reviews.
Great reviews are the difference between an in-demand property that is constantly rented out and a guest choosing to stay with a competitor. You can help yourself get the best rating possible by ensuring fast and clear communication. As well as flawless check-in and features that make guests feel at home. Also, extra touches like guidebooks to help them make the most of their stay. Going above and beyond will ensure guests have a great experience and leave five-star reviews.
- Be Aware of Expenses
Short-term lets come with costs that investors need to be aware of. Firstly, insurance for short-term rentals. Secondly, you’ll need to take care of utilities, taxes, furnishing, repairs, regular cleaning and maintenance. As well as basic supplies like bath and laundry products all need to be covered.
What is a Good ROI on a Vacation Rental Property?
Vacation properties and short-term rentals tend to have higher yields than residential properties. A good ROI for a rental property is usually 10% and above. This will depend on how long you have vacancy periods and your budget. Ensuring your property covers expenses like the mortgage and bills is essential to make sure it remains profitable. You Can learn more about the basics of rental yields in this article.
A short-term rental can be a great property for inventors. Typically higher rents, the flexibility to enjoy it when you choose as well as a market growing in demand all make it an appealing investment for 2022. Investors should be aware that location and amenities are top priority for guests and should be sure to understand the fees involved and the work required to ensure their property doesn’t remain vacant for long periods. To find out more about investing in short-term rental property, get in touch with our team today.