Short-Term or Long-Term Lets Compared – Pros, Cons & What’s Right For You
If you are considering investing in property, it is important to have a clear strategy in mind before you purchase. One of the most common decisions investors face is whether to operate their property as a short-term let or a traditional long-term rental.
Both strategies can be profitable, but they operate very differently and suit different types of investors. Factors such as your desired level of involvement, the location of the property, financing options, and your income goals will all influence which approach is best for you.
Below, we break down how each option works, along with the key advantages and disadvantages to consider.
What Are Short-Term Lets?
Short-term lets (STLs) are properties rented out for short stays, typically ranging from a few nights to several weeks. These are commonly marketed on holiday-let platforms or booking portals and are often used by tourists, business travellers, or people visiting an area temporarily.
Unlike traditional tenancies, guests do not live in the property as their permanent home. Instead, they occupy it for a limited period before moving on, similar to staying in a hotel but with the added privacy and comfort of a full property.
Advantages of Short-Term Lets
Often higher yield – Short-term lets can generate significantly higher nightly rates than traditional rents. In popular locations or during peak seasons, this can result in a higher overall yield.
Flexibility of use -Owners can block out dates when they wish to use the property themselves or allow friends and family to stay, making it a great option for holiday homes.
Regular property checks – Because guests frequently change over, there are regular cleaning and inspection periods between stays. This allows landlords to keep a close eye on the condition of the property rather than only seeing it once or twice a year.
Fewer issues with long-term tenants – Guests are only staying for short periods and have no intention of making the property their permanent residence, meaning there is far less risk of dealing with problematic tenants or lengthy eviction processes.
Disadvantages of Short-Term Lets
Income is not guaranteed – Unlike long-term tenancies, bookings can fluctuate. There may be periods with no occupancy, particularly outside peak seasons.
Seasonal vacancy risks – Some properties can experience longer empty periods during quieter months, particularly during winter in holiday-driven areas.
Higher operating costs – Short-term lets typically have higher running costs. These may include management fees, booking platform commissions, cleaning costs, and furnishing expenses. Landlords are also responsible for paying utilities and council tax.
Limited mortgage options – Not all lenders allow short-term or holiday letting, so financing options can be more limited compared with standard buy-to-let mortgages.
Potential regulatory restrictions – Depending on the location, there may be restrictions from the local council, planning requirements, or limitations within leasehold agreements that prevent or restrict short-term letting.
What Are Long-Term Lets?
Long-term lets are the traditional rental model where a tenant rents a property as their main residence, typically under an assured shorthold tenancy agreement (AST). These tenancies usually last six to twelve months initially, often continuing for several years if both parties are happy.
This type of letting is the most common approach used by buy-to-let investors.
Advantages of Long-Term Lets
Stable and predictable income – With tenants committed to longer agreements, landlords benefit from consistent monthly rental payments over extended periods.
Tenants cover household bills – In most long-term rentals, tenants are responsible for costs such as utilities, internet, and council tax, reducing the landlord’s ongoing expenses.
Lower management costs – Letting agent management fees are typically around 10–15% plus VAT, which is often lower than the total management and operational costs associated with short-term lets.
More mortgage options and better rates – There are many lenders offering buy-to-let mortgages for long-term rentals, often with more competitive interest rates.
Tenants may take care of minor maintenance – Because tenants treat the property as their home, they may be willing to handle small maintenance tasks themselves and generally want to keep the property in good condition.
Occupied during winter months – Unlike some holiday lets, long-term rentals remain occupied year-round, which can help prevent issues associated with empty properties during colder months.
More hands-off management – Once a tenant is settled, long-term lets can be relatively low-maintenance compared with the constant turnover of short-term bookings.
Disadvantages of Long-Term Lets
Lower potential yield – Monthly rents are usually lower than the potential income generated from short-term lets in high-demand areas.
Less flexibility – Landlords cannot easily use the property themselves while a tenant is living there, and possession typically requires following formal legal processes.
Problem tenants can be costly – If a tenant stops paying rent or becomes problematic, the process to recover possession can be lengthy and expensive.
More legislation and regulation – Long-term rentals are subject to extensive landlord regulations and compliance requirements, which continue to evolve.
Short or Long-term, When Should You Consider Each Option?
Choosing between short-term and long-term letting often depends on several key factors.
Location plays a major role. Properties in tourist hotspots, city centres, or near attractions may perform exceptionally well as short-term lets, while residential areas may be better suited to long-term tenants.
Property type and size can also influence the decision. Holiday-style properties or apartments in popular destinations often work well for short stays, whereas family homes are typically more suitable for long-term renting.
Level of involvement is another important consideration. Short-term lets usually require more hands-on management, frequent communication with guests, and ongoing maintenance.
Finally, financing options can affect your strategy. If your mortgage lender only permits standard buy-to-let arrangements, a long-term rental may be your only option.
Short-Term Lets Vs Long-Term Let – A Summary Overview
Both short-term and long-term letting strategies can be successful, but they suit different investment goals and lifestyles. Short-term lets may offer higher returns and greater flexibility, while long-term rentals provide stability, predictable income, and a more hands-off approach.
Carefully considering your property’s location, your financial strategy, and the level of involvement you want will help you determine which route is best for your investment.
Thinking of investing in property? Speak with one of our consultants today to explore the best strategy for your goals.
