Reasons Short-Term Rentals Aren’t a Sustainable Investment Property Strategy

Reasons Short-Term Rentals Aren’t a Sustainable Investment Property Strategy

Firstly I am sure people will disagree however I believe there are various “Reasons Short-Term Rentals Aren’t a Sustainable Investment Property Strategy”

I know that AirBnb is the favor of the year for many property investors in the UK…however is it sustainable….What if councils implement new laws? Airbnb may win the legal battle for short-term rental landlords in many areas. Still, that won’t ensure the sustainability of this strategy for buy and hold or retirement investing. The high rents may be alluring to investors, and the destinations can be attractive. However, I see at least six flaws that could cause Airbnb investors a lot of pain down the road. All one has to do is look at London rents currently.

1. Short-term rentals depend on the tourists

2. Short-term rentals create artificially high rental rates which probably are not sustainable

3. Short-term rentals increase landlord competition & lower prices

4. Short-term rentals don’t support reliable, long-term tenants who stay in your property and pay down your mortgage.

5. Short-term rentals provide inconsistent cash flow.

There are no silver bullets in property, however in my personal opinion a hybrid strategy with buy to let and short term rentals are HMOs. Honestly even though we have minimum 6 month ASTs we have turn over and some drama. We do get high rents much more than buy to let. Then there are those who say HMOs have saturation. My opinion it all has to do with finish and location.

Personally I am big proponent of both professional HMOs as well as Social Housing HMOs which are on 5 year contracts… no voids…no management…compare this to the turnover on short term rentals….

thoughts?