In recent years, “Airbnb” has become a household verb, much like “googling” something. With the growth of platforms such as Airbnb and Booking.com, many property investors are exploring short-term letting as a potentially lucrative venture. However, while the returns can be attractive, it’s far from a passive income stream.

If you’re considering purchasing a property to use as serviced accommodation, here’s what to keep in mind before diving in.

1. Choose the Right Type of Property

The first, and perhaps most important, decision is selecting a property that fits the short-term letting market. Are you considering a charming countryside cottage perfect for weekend escapes, or a modern flat that caters to corporate travellers?

Think carefully about your ideal guest and research similar properties in the area. Look at nightly rates, availability calendars, and guest reviews to get a sense of demand and competition. A good fit between property and market is essential if you want to maximise occupancy and profit.

2. Is Your Property Truly ‘Rental Ready’?

Unlike traditional lets, short-term guests arrive expecting a fully equipped, hotel-standard experience, only more personal. That means you’ll need to provide everything from crockery and cutlery to linens, hairdryers, and Wi-Fi.

You may even be able to command a higher rate by including extras such as a dishwasher, iron, or even streaming services like Netflix. Just remember to budget accordingly. Fully furnishing and equipping a short-term rental is a considerable upfront investment.

3. Presentation and Promotion Matter

Successful short-term lets are all about presentation. High-quality, professional photography is a must. Your online listing is your shop window. Consider staging the home to reflect its intended audience and invest time into creating a compelling listing.

Bear in mind that listing your property on booking platforms isn’t free. Most sites charge service fees or commission, so factor these into your financial projections from the outset.

4. Who Will Manage It?

Each guest changeover requires fresh linens, a deep clean, and attention to detail. Depending on occupancy, this could be several times per week. Maintenance also needs regular attention, whether it’s topping up paintwork, fixing a leaking tap, or replacing a broken wine glass. Many owners choose to work with a professional management and cleaning team to help stay on top of it all.

5. Don’t Overlook Ongoing Costs

Running a short-term rental is, in many ways, like running a boutique hotel. You’ll still be responsible for utilities such as gas, electricity, broadband, council tax (or business rates), and potentially subscription services. These outgoings can add up, and unlike with long-term tenants, you can’t expect guests to be mindful of utility usage.

6. Know Your Tax Position

It’s important to speak with a qualified tax advisor to understand the implications of owning a short-term rental, especially if it’s not your primary residence. Tax treatment can vary, and proper planning can save you unexpected costs later on.

Bonus Tips to Streamline the Process

• Create a guest manual with essential details like Wi-Fi codes, heating instructions, and local recommendations. It saves time and enhances the guest experience.
• Standardise your cleaning process with a checklist for your team. This ensures every stay starts with a consistently high standard.
• Stick to simple crockery and furnishings that are easy to replace, ideally from a reliable, budget-friendly supplier.
• Consider using identical sets of linen and kitchenware to make replacements seamless and affordable.

Yes, short-term letting can yield impressive income figures. But it comes with significant responsibilities, ongoing costs, and the need for constant oversight. It’s worth asking yourself: do I have the time and energy to run this hands-on, or would a more traditional rental offer a better balance of return and simplicity?

If you’re exploring property investment or considering selling or letting a property, we’d be delighted to offer a free market appraisal. Contact your local managing partner today and we’ll set up a time to chat. We’d be delighted to hear from you.