Short-term, mid-term and long-term lets are terms that are used a lot but it can be difficult to understand which one best maximises the income on your investment properties.
All three forms of letting clearly have their strengths, but they can also have drawbacks. Short-term lets are great for achieving higher nightly rates, however, they lag behind when demand shrinks over winter and spring periods or once the 90 day short-term let limit has been reached. Long-term lets on the other hand sacrifice higher short-term returns but provide a steady income over the course of a year. Mid-term lets bridge the gap between the two, offering a level of flexibility that’s becoming more and more desirable, but they don’t necessarily provide the optimal solution on their own.
So why not combine all three?
Trends show a cultural shift in the way that we live, work and consume. Finding products and services that cater to us, as opposed to the other way around, is becoming a basic requirement.
In fact, the term flexibility has become a bit of a buzzword. Flexible working practices, flexible study, and even flexible payment solutions. And one thing’s for sure, the property rental market is headed in the same direction.
We’re always told ‘you can’t have your cake and eat it’ but with flexible letting, you can do just that.
With flexible letting, you’re not limited to offering one letting type which might not be the most profitable solution. The model responds to evolving market demands by blending together short-term, mid-term and long-term lets, resulting in measurable benefits to both property investors and residents.
At City Relay, we’ve seen a big increase in the average length of stay for short-term lets compared to pre-pandemic levels; in some months the average length of stay increased by over 2 weeks. We’ve also seen flexible living reflected in a notable rise in last minute bookings, probably due to individuals quickly responding to the ever-changing environment.
In providing residents with the flexibility to book last minute and stay for the amount of time they need, our occupancy rates at City Relay are almost double that of the rest of the London market. And thanks to smart technology, we’re able to adapt rent rates to best reflect optimal occupancy all year round, further maximising ROI.
Trends are signalling a shift in short-term lets towards more mid-term lets (anything from 28 days to 6 months), but they’re also highlighting a move away from long-term lets in favour of much shorter contracts, including month-on-month rolling contracts. It’s even estimated that the increasingly popular mid-term let provides around 15% more yield than the traditional 12-month contract since it provides a lot more flexibility.
Long story short, in reaping the benefits of short-term, mid-term and long-term lets while discarding their disadvantages, flexible letting allows you to respond to and adapt alongside the changing market, all while ensuring security and the best return on your investment.
Sounds interesting but it seems like a lot of work…
Flexible letting is proactive by nature and in order to make the most of its financial benefits, forward-planning and strategy is required, as well as diversification of listings and a lot of research. This means that choosing the right property management company to support you in this and ensure the smooth letting of your properties every day of the year is really important if you want the best returns.
That’s where we come in.
At City Relay, we’re committed to helping landlords make the most of their investment properties by combining industry and London expertise with smart technology and a consistently high quality of service.
Bid farewell to lengthy and time consuming admin. We make sure you have easy access to all the information you need, at all times. Our proprietary, industry leading technology, DRIVE, provides real time information on your portfolio, giving you total visibility over all activities relating to your properties. Drive also lets you review detailed calculations of your finances and monitor your properties’ performance.
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Interested to learn more? Don’t hesitate to get in touch!