When it comes to investing in buy-to-let properties, one of the big questions you’ll face is: Do you want long-term tenants or short-term ones? Sometimes the answer is crystal clear, but other times, it’s not so straightforward.
In this guide, we’ll break down the pros and cons of both options to help you figure out what works best for you. If you’re stuck on which path to choose, don’t worry—this should give you a much clearer picture.
What’s A Long-Term Tenancy?
Long-term tenancies are a go-to choice for many landlords. Typically, this means offering tenants a lease of at least 12 months, with the option to renew when the term ends—provided both you and the tenant are happy to continue.
Interestingly, the 2018 English Housing Survey revealed that 41% of landlords are open to offering leases longer than 12 months, as long as there’s a break clause included. However, landlords with more experience (three years or more in the business) are generally less inclined to commit to longer leases. Why? Because shorter tenancies make it simpler to deal with tricky tenants if problems arise.
That said, many landlords and agents admit they’d be open to offering extended leases of three years or more if two key things were addressed: an easier eviction process for problem tenants and financial incentives, like adjusting rent annually with inflation.
Advantages Of A Long-Term Tenancy?
Long-term tenancies come with plenty of perks for landlords. The biggest one? A steady, reliable income for a year or more—assuming your tenant keeps up with the rent, of course. For landlords with buy-to-let mortgages, that predictability can be a real lifesaver.
But that’s just the start. Here are some other reasons why going the long-term route might make sense:
1. Fewer Headaches with Empty Properties
Let’s face it: dealing with an empty property isn’t fun. It’s a magnet for trouble—squatters, maintenance issues, and even problems with your insurance if it stays empty too long. Plus, who wants to pay heating bills for an unoccupied home in the middle of winter? Long-term tenants mean fewer gaps between leases, so your property isn’t sitting idle. They’re also less likely to move out on a whim, especially once they’ve settled in.
2. Less Day-to-Day Hassle
With long-term tenants, you’re not constantly looking for the next booking or arranging check-ins and cleanings like you would with a short-term rental. Once they’re moved in, your workload shrinks to routine maintenance and collecting rent. It’s about as close to passive income as buy-to-let gets!
3. Tenants Who Care for the Property
People who stay in a home for the long haul often treat it like it’s their own. That means less wear and tear and a bit more care in how they use the space. Sure, things will need replacing eventually, but probably not as often as with a holiday let or short-term rental.
4. Quicker Fixes for Small Issues
Long-term tenants are more likely to report problems when they happen. Whether it’s a dripping faucet or a faulty appliance, they’ll speak up because they want their home to stay comfortable. That gives you the chance to address small issues before they turn into expensive disasters.
5. Building Better Relationships
With long-term tenants, you can develop a real rapport. Over time, you get to know them, and they feel more secure knowing their home isn’t going anywhere. Research from Shelter found that nearly half of families (43%) worry about being evicted, which can strain tenant-landlord relationships. By offering stability, you’re setting the foundation for a more positive and cooperative dynamic.
The Disadvantages Of Long-Term Tenancies
While long-term tenancies have their perks, they’re not without their challenges. Let’s take a look at some of the potential pitfalls so you can weigh up the pros and cons.
1. The Risk of a Problem Tenant
One of the biggest worries with long-term tenancies is ending up with a tenant who’s more trouble than they’re worth. If they stop paying rent or cause damage to the property, you could be looking at months of stress and financial loss while navigating the eviction process. Unfortunately, getting a problematic tenant out isn’t a quick fix—it can take a while, leaving you with repair bills and unpaid rent to juggle.
2. Limited Flexibility
Even with the best tenants, long-term tenancies tie your hands a bit. Want to sell the property or rent it out to someone else? You’ll have to wait. While serving a Section 21 notice is an option, you can’t do it within the first four months of a tenancy or before the fixed term ends. Plus, there are plenty of rules to follow, so it’s not as simple as changing your mind when life throws you a curveball.
3. Lower Rental Income
If your property’s in a high-demand area, especially one popular with tourists, you might be leaving money on the table with a long-term rental. Short-term lets, like those listed on Airbnb, often allow landlords to charge more—sometimes significantly more—than a traditional tenancy would bring in. For landlords chasing higher yields, long-term tenancies might feel like a missed opportunity.
4. Dealing with Red Tape
Managing a long-term tenancy means jumping through a lot of hoops. From protecting deposits in a government-approved scheme to ensuring tenants have an Energy Performance Certificate, there’s a mountain of admin to tackle. And that’s just the start—compliance rules in the private rental sector seem to grow by the day.
Short-term rentals come with their own challenges, of course, but they tend to involve less red tape. For instance, the worst you might deal with is a bad review from a guest, which can sting but doesn’t have the same financial or legal implications as long-term rental disputes.
What’s a Short-Term Let?
Short-term lets are all about flexibility. These are often holiday rentals—think Airbnb or other vacation rental platforms—but they can also include situations where landlords rent out an empty room or property to someone needing a temporary place to stay.
While critics argue that short-term lets are squeezing housing availability, there’s no denying they can be incredibly lucrative. That said, short-term lets aren’t always an option. If you’re buying an apartment in a block, you’ll need to check the leasehold terms carefully—many leases include clauses that ban short-term rentals entirely.
If you’re thinking about dipping your toes into the short-term rental market, it’s worth weighing up both the potential profits and the restrictions that might come with this option.
Why Short-Term Lets Might Be Your Best Bet
Short-term rentals have plenty of perks, especially if you own the right kind of property. A spacious flat in downtown Vancouver? Jackpot. A two-bed apartment on a less-than-glamorous street? Probably less so. The location and style of your property make all the difference, but overall, short-term lets tend to be more profitable than long-term rentals.
In fact, you could earn in a single week on Airbnb what you’d normally make in a month with a traditional tenancy. Pretty appealing, right? Just keep in mind that rates and occupancy can dip in the off-season—summer hotspots don’t pull in the same crowds come winter.
- Flexibility for You
One of the best perks of owning a short-term rental in Vancouver, Washington? You can use it yourself whenever you like! If your property is in a beautiful spot like Fisher’s Landing or the scenic Minnehaha area, it’s like having your very own vacation retreat on standby. Need a quick escape or a cozy weekend getaway? Simply block out the dates on your booking calendar, grab your bags, and enjoy your own slice of Vancouver.
- No Tenant Hang-Ups When Selling
Thinking about selling your property? With short-term lets, there’s no need to navigate tenant notices or wait months for someone to move out. Just stop accepting bookings and pop it on the market. Easy!
- A Social Element
If you’re the kind of landlord who likes meeting new people, short-term lets can be a real treat. You’ll have a rotating cast of guests—some will return, but many will be new faces. While you don’t have to be hands-on, being friendly and welcoming can make the experience even more rewarding (and maybe even earn you glowing reviews).
Short-term rentals aren’t just about the money—they also give you flexibility and the chance to connect with a variety of people. If that sounds like your kind of thing, this could be the perfect approach for you!
The Disadvantages Of Short-Term Rentals
While short-term rentals have plenty of upsides, they come with their fair share of headaches too. If you’re considering diving into the short-term let market, here are some of the key downsides to keep in mind.
- Mortgage Rules Can Be a Dealbreaker
Not all lenders are on board with short-term lets. Many buy-to-let mortgage providers require a minimum six-month assured shorthold tenancy (AST). Listing your property on Airbnb without clearing it with your lender could breach your mortgage terms and land you in hot water.
If your lender doesn’t allow short-term rentals, you’ll likely need to remortgage with a specialist lender. These are often smaller institutions, and their products are typically only available through brokers. If this sounds daunting, don’t worry—a mortgage broker who knows the short-term rental game can help.
- It’s Not as “Set It and Forget It”
Short-term lets require a lot more hands-on management than a traditional tenancy. Guests come and go frequently, which means constant cleaning, managing bookings, handling maintenance, and sometimes greeting guests. You can hire a property manager to do this for you, but that’ll cut into your profits.
Unlike long-term lets that can run on autopilot once tenants are settled, short-term rentals require ongoing effort. And yes, that includes the occasional frustrating guest who thinks leaving trash everywhere is acceptable.
- Faster Wear and Tear
Short-term rentals see more wear and tear than long-term properties. With a steady flow of new people, your property might endure accidental damage, scuffed walls, or quicker wear on furniture. Platforms like Airbnb offer a “Host Guarantee” for major damages, but general wear and tear? That’s on you.
To keep your place looking appealing, you’ll likely need to redecorate or refresh the property every couple of years. And forget about using mismatched furniture or that saggy old sofa—guests expect decent quality, and bad reviews can hurt future bookings.
- Income Can Be Unpredictable
Short-term rental income isn’t as steady as long-term rent. Peak seasons like summer can be lucrative, but off-seasons might leave your calendar empty.
The COVID-19 pandemic highlighted just how risky this model can be. When tourism plummeted, many short-term landlords lost their income overnight, leaving them scrambling. While such events are rare, it’s a reminder that short-term lets aren’t always a guaranteed moneymaker.
And don’t forget—you’re footing the bill for utilities. Gas, electric, broadband, council tax, and more all fall on you, so be sure to factor these costs into your pricing.
- Potential Neighbor Issues
Your neighbors might not love the idea of living next to a revolving door of short-term guests. Complaints about noise, late-night parties, or general disruption are common when a property becomes a short-term rental.
Be prepared for a few angry calls if things get rowdy—or worse, for ongoing tension with your neighbors. Building good relationships with them and setting clear house rules for guests can help, but it’s not a guaranteed fix.
Short-term lets can be exciting and profitable, but they also come with a unique set of challenges. Knowing what you’re getting into will help you decide if this approach is the right fit for your property—and your lifestyle.
Long-term Tenancies or Short-term Lets?
So, which way should you go? It all comes down to your priorities and what makes the most sense for you.
Start by thinking about the points we’ve covered. What matters most to you—steady, predictable income with less hassle, or the potential for higher earnings with a bit more effort? If you’re leaning toward short-term lets, remember that location is key. A picturesque seaside cottage or a city-center flat will perform much better than a property in a quieter, less touristy area. That said, location plays a big role in long-term rentals too, so don’t discount its importance.
Next, run the numbers. Compare the potential earnings and costs of each option. Factor in things like mortgage payments, insurance, and any extra work or expenses that come with managing short-term lets. Once you’ve done the math, you’ll have a clearer picture of which route aligns best with your financial goals.
The good news? You’re not locked in forever. If you start with one strategy and decide it’s not working, you can usually switch gears. Just be aware that changing from long-term tenancies to short-term lets—or vice versa—can affect your insurance and mortgage terms, so make sure you’re covered before making the leap.
Ultimately, there’s no one-size-fits-all answer. It’s all about finding the balance that works for your property, your lifestyle, and your financial ambitions.