Long-term tenancies Long-term tenancies mean that letting agents and landlords must comply with a number of legal obligations, to ensure that the property is up to the security of the tenants. A long-term tenancy usually lasts from one year onwards. While they lack the flexibility of short-term tenancies, they are better in several respects. Tenants living in a long-term property are more likely to take care of the place and treat it as their own.
This is advantageous for landlords, as it means less wear and tear. Yes, you will still need to replace things, but usually not as often as you would in a holiday rental. So what is the duration of a long-term rental contract? In short, a long-term rental is from 6 months onwards. Although long-term leases do not offer the same flexibility and rate increases as short-term leases, they perform better in several respects.
As a general rule, a short-term lease is usually a rental property that is offered to the market for six months or less. Leases ranging from 6 months to one year are usually marketed as medium-term leases, and anything longer than one year is considered a long-term lease. Unlike long-term rentals, which offer a very passive income once the tenancy is established, short-term rentals are an ongoing job as long as tenants are accepted. In addition, landlords are responsible for paying the bills that long-term tenants normally pay.
Since cash flow is critical, especially if a buy-to-let mortgage is to be paid, many landlords prefer to opt for a long-term lease. The main advantage of a long-term lease is that you have a guaranteed income for a year or more (unless the tenant stops paying, of course). Owners can earn the same for a week on Airbnb as they do in a month if they offer the property as a long-term rental. In addition, with long-term tenants you build and maintain a relationship, potentially over several years, so it is imperative that you keep it healthy, especially by being attentive, responsible and fair (that includes responding to all maintenance issues promptly).
Long-term rentals are the preferred option for landlords who want to earn a steady income each month with as little effort as possible, but this nirvana is entirely dependent on finding good tenants. Whatever type of buy-to-let property you want to invest in, you must decide whether you want long-term or short-term tenants. The location of the property will be important if the short-term rental business model seems attractive, but this also applies to long-term rentals. It is natural that tenants with a six- or twelve-month rental contract start looking for another place to live when their contract comes to an end, while tenants living in the property on a long-term basis are more settled.
During the long-term tenancy, the landlord can get a lower rate compared to short-term rentals, but it is still considerably more lucrative than a long-term tenancy over a 12-month period. As expected, the disadvantages of a long-term rental are quite similar to the advantages of a short-term rental. One of the key aspects of being a successful landlord is to have a positive cash flow, and long-term rentals often help to achieve this.