Before the events of the past few weeks, the short-term letting market was a booming business. While it’s expected to fully bounce back further down the line, Airbnb is offering a new alternative.
Airbnb is the international short-term letting giant that most people across the world have heard of, if not used. It’s gained a huge market share over recent years with its efficient booking system, useful app and easy service options.
For many buy-to-let landlords, short-term lettings are a great way to diversify a property portfolio. Long-term rentals will always have high demand, as more and more people rent rather than buy. But short-term and holiday lets come with their own set of advantages, and they have become more appealing to landlords in recent years. Read more about why in this article.
Shift away from short-term
The property hosting platform, which allows people to rent out all or part of their home to guests, has now announced some big changes. It recently received $1bn of private equity funding from Silver Lake and Sixth Street Partners – a massive investment for the firm. It is also set to raise a further $1bn in debt.
And an Airbnb spokesperson has revealed where the funding will be targeted.
“We will focus on longer-term stays. From students needing housing during school, to people on extended work assignments, Airbnb is a place where many have found longer-term housing.”
“In the future, dreams of living in another community will become a growing reality – in homes that come with the benefits of Airbnb.”
Airbnb classes a long-term stay as one of more than 28 days. In its new settings, you can book for anywhere from two weeks to six months.
The firm has recently blocked all bookings through its platform because of the coronavirus outbreak. It is only allowing stays to be offered to NHS staff and key workers, either for free or at a subsidised rate.
How long-term stays work
There is now a page on Airbnb’s website titled “Monthly stays made easier with Airbnb”. On it, it advertises the option to “stay for months”. It offers the opportunity to stay in one home for a longer period of time, “without committing to a long-term lease”.
For landlords exploring various letting options right now, this could provide a new avenue. The downside of short-term lets can be that they are more likely to have vacant periods. This option of having people sign up for months at a time could provide a balance, with a more predictable income stream for the landlord.
However, it is important to know the rules for where you live. In London, for example, there’s a 90-day annual limit on property listings. If you live outside this area, and you have guests for more than 140 nights per year, it may then be classed as a self-catering property or holiday let. This could mean business rates are payable.
At BuyAssociation, some of our investment opportunities allow short-term lettings and Airbnb options. We also cater for investors looking for long-term buy-to-lets, as well as owner-occupiers seeking a great investment for the future. Get in touch for more details.