The short-term rental industry has taken a huge hit over the past few months. The Covid-19 pandemic is largely responsible, with its significant impact on the economy leading to Airbnb losing $1.5 billion in bookings over a number of days back in March. With so many Airbnb hosts not receiving their usual income on their short-term lets, property owners are coming to us for advice on transitioning back towards a more traditional long-term rental. As more and more areas have gone into local lockdown over the past two weeks, this seems to be a growing trend. If you find yourself in a position of uncertainty, switching to a long-term let could potentially be the best property investment strategy for you. At CPS Homes we'll be here to help and guide you through the process.
Established 12 years ago, Airbnb allows people to list their property (or a room within it) online, where people can book to stay there on a short-term basis. Guests tend to stay for a couple of nights, or a week or two, but usually no longer than a month. It's a potentially lucrative route to go down. Some short-term properties generate more in a week through hosting multiple occupants compared to the weekly rental income generated from tenants locked into a longer contract. City breaks have also risen in popularity, businesses are putting staff up in Airbnbs more frequently and there's an overall surge in the number of people looking for a holiday with more privacy than a packed hotel can offer. Landlords were pretty much guaranteed to find guests. Then along came Covid-19…
A forced lockdown might have given us a greater appreciation for the little things in life (like easily accessible pasta, flour and toilet roll), but the pandemic has also made people more cautious and risk-averse. Since the outbreak, Airbnb hosts are starting to find themselves facing long periods of time where their property is unoccupied. People don't want to risk booking a sunny holiday abroad only to find out halfway through that they'll be stuck in quarantine when they get home. Not to mention a large number of people do not feel comfortable staying in rooms that have been recently occupied by strangers, for fear of contracting the virus. Consequently, landlords don't want to risk listing their property on Airbnb now that demand has drastically plummeted. The general consensus is that they're feeling much more secure if they can get a contract signed, guaranteeing a rental income over the next few months, or years.
This shift back towards traditional long-term rentals may be a good thing, regardless of a global pandemic. Here's why:
The most stable route - Since the pandemic has hit the tourism sector so badly, there's been a huge increase in people cancelling their short-term stays (most UK hosts have seen 70% of their bookings cancelled since March. Plus, many are not booking short trips at all - people don't want to go away when rules and restrictions are still up in the air. Even when things get 'back to normal' there will be periods where your property is unoccupied if it's on Airbnb. With a long-term let, you'll have a steadier rental income with no breaks.
Reduced cleaning costs - A quick once over after a guest's Airbnb stay just won't cut it post-Covid! With a swift turnover of various occupants, the costs for numerous deep cleans will start to cut into your profits. With a long-term let where people aren't coming and going, they won't need to be carried out anywhere near as often.
Reliable tenants - With the help of a property management agency like ourselves, you can find reliable, screened tenants who will have a vested interest in taking care of the property. People who only stay a few nights will not be getting attached, so there's likely to be a lot more wear and tear for you to attend to.
Peace of mind - Long-term lets can mean much less management and admin on your end. You won't be responsible for restocking toiletries and tea bags, speaking to multiple guests per week or dealing with cancellation refunds. The more individual occupants, the more time you'll need to set aside to manage the stays; it's a lot of work, which doesn't suit everybody. Working with professionals will provide peace of mind throughout the process. If you want to be more hands-on with long-term tenants you can be, but if preferred, we can provide a fully managed service and do most of the work for you.
At CPS Homes, we are Wales' biggest property management service provider and experts in landlord responsibilities. For a confidential chat about how we may be able to assist, call us on 02920 668585, e-mail email@example.com or pop into one of our branches in Cardiff for a chat.