Long-Term Rent vs Short-Term Rent: What’s The Difference?

Long-term lettings are generally agreements between tenants and landlords that will cover a period longer than six months. They are ideal for those looking to stay in an area for a long time.

Long-term leases offer more stability for both the landlord and renter. The landlord receives a consistent cash flow of rental income, and the tenant avoids fluctuating rental prices and the awkwardness of having to move locations often.

However, landlords cannot make the most of changes in rental prices, and if long-term tenants cause problems, then it can cause issues in solving them.

There can also be more work for landlords due to additional legal requirements they have to meet throughout the tenancy. Property management companies can help manage this for you, but this does come with a fee.

Renters may find somewhere else that suits their needs, but being stuck in a long-term lease means they have to remain at their current location.

Long-term rental properties are often highly sought after by renters as they offer stability and allow both renters and landlords the ability to make long-term financial plans.

• The consistent cash flow for landlords

This guaranteed income allows you to have peace of mind that you are making a return on your investment. While it will not increase over the term of the tenancy, it is a stable source of income.

• Avoids the hassle of finding tenants

Having to find tenants for your rental property can be a pain, so knowing you will have tenants for the long-term future makes your life much easier. It allows for landlords and tenants to operate in good faith.

• Allows for flexibility in negotiations

Seeing as landlords offering long-term tenancies expect to be working with their tenants for an extended period, tenancy agreements may be more flexible to ensure the relationship between landlord and tenant remains smooth.

• Less time and effort

One of the key benefits of long-term rent is that, quite often, there is little for landlords to do once the tenancy agreement is set up. Many renters set up bank transactions to automatically send rent money every month, so it is often just a case of upkeep and collecting your money.

Short-term lettings are agreements between the landlord and the renter that can be anywhere from a couple of weeks to six months.

Offering a cost-effective alternative to staying in a serviced accommodation like an Airbnb property or hotel, short-term lettings are ideal for renters staying in an area for a short period.

These are ideal for tenants travelling a lot for work or other reasons, as well as landlords in areas with more demand than supply in the real estate market. This is because they can adjust rental prices easier, and get an increased return vs long-term letting.

However, short-term rental properties can be riskier for landlords, as it means having to regularly find new tenants to occupy the property. You may also have additional fees that long-term tenants would pay themselves, like furnishings, Wi-Fi, and bills.

Tenants may cause more wear and tear to the property due to not seeing it like a home, as with long-term agreements. Additionally, neighbours may not appreciate the constant coming and going of tenants.

• Higher Rental Fees

Landlords can make the most of the rising prices in the rental market through the ability to increase rental fees regularly. This means you can collect higher rent payments from tenants to match the rental market as a whole.

• More Flexibility

If you are having issues with a tenant, it is easier to move on from them with a short-term let. This means you are less likely to be stuck with troublesome tenants, as you do not need to wait as long for their contract to run out.

• Easier for Convenience

Tenants needing somewhere to live fast are more likely to sign a short-term lease than a long-term one. In addition, a tenant on a short-term lease may ask to make it a long-term one. They are less likely to negotiate heavily, unlike with long-term contracts.

• Lower Exit Costs For Tenants

Unlike a long-term let, tenants do not have to wait a long time to move on from a tenancy if they choose to. This means they will not still be paying for the property if they move out for whatever reason.