Short Term Lets vs Long Term Lets: Which is Right for You?

Depending on the property, your long-term financial goals, and the flexibility that you require from your rentals, there are a number of considerations when it comes to deciding whether or not you should offer your rental property out as a short-term or long-term let.

For example, a small apartment in a popular holiday destination may bring in more cash as a short-term let. On the other hand, a single-family home in an area close to transport links to London is likely to generate better returns as a long-term let with lower vacancy rates.

Landlords and investors must understand the pros and cons of each investment strategy, as well as the potential yields and rates, the flexibility of tenancy length, and the legal landscape of 2025, when deciding on a strategy.

What is a Short-Term Let?

A short-term let or short-term tenancy is typically referred to as a rental agreement that is under six months. This can be a bi-annual or month-to-month tenancy. More often than not this can range from single nights to week-long visits. Short-term lets are most commonly occupied by holidaymakers and people travelling for business.

Short-term lets are most commonly used by:

• Holidaymakers
• Business travellers
• People between house moves

The rise of platforms like Airbnb and Booking.com made it incredibly easy for landlords to market properties directly to short-stay guests,  but with this ease has come added competition and new regulations.

In England, a new national register for short-term lets is being introduced in 2025, and some local authorities (especially tourist hotspots) have begun setting caps or licensing requirements.

What’s the Difference Between a Holiday Let and a Long-Term Let?

Generally, a short-term holiday let is a property that is let out to holidaymakers for short periods, usually from 3 nights to a few weeks, or up to 31 days.

To qualify as a furnished holiday let for tax purposes, your property must be:

• Available to rent at least 210 days per year.
• Let commercially for at least 105 days.
• Used for short stays and at a fair market rent (renting to friends cheaply or using it yourself doesn’t count)

A long-term let (also known as a buy-to-let) is typically a property that is let out for 6 to 12 months at a time. You can read more about furnished holiday lets here.

Advantages of Short Term Lets

So why do some landlords opt for short-term lets rather than long-term? Here are the main advantages.

Higher Potential Yields

Because you charge by the night, good properties can pull in up to 30% more income compared to traditional long-term rents ,  sometimes even higher during peak season.

Greater Flexibility

You can block out time for your own use ,  whether it’s a holiday home, a family visit, or renovations.

Reduced Risk of Problem Tenants

Short-stay guests usually pay upfront through booking platforms, lowering the risk of rent arrears or eviction battles.

Disadvantages of Short-Term Lets

While higher yields might sound enticing, it’s not all sunshine and rainbows when it comes to short-term lets. There are a few distinct disadvantages for landlords running these operations.  

More Work and Time-Intensive

Managing a short-let properly is closer to running a hospitality business than a rental.
You’ll need to:

• Handle frequent guest changeovers
• Organise cleaning and maintenance
• Offer a hotel-level guest experience

Lower Occupancy Rates

The average occupancy rate for UK holiday lets was around 32 percent in 2023. 

You need strong marketing and location advantages to keep the property booked consistently year-round.

Higher Costs

Frequent cleaning, maintenance, linen, utility bills, council tax, and platform fees can quickly eat into profits.

Landlord Studio can help make managing short-lets easier with expense tracking, digital document storage, and tenant/guest communication templates.

Create your free account today to stay organised and compliant.

Final Thoughts on Short Term Lets

It’s safe to say that short-term lets are significantly more demanding and more costly than operating a regular long-term let. However, if you have the time and desire to put the work in, the financial turns can be much greater. Especially if you manage to keep occupancy rates at a reasonable level.

If you are considering whether or not you should rent your property out as a short-term let, it is worth first asking if your property is suitable for this type of tenancy.

Advantages of Long-Term Lets

Long-term tenancies or traditional long-term residential tenancies are generally 6-12 months, though some can be longer. After listing your property and securing a tenant, you need to maintain the property, collect rent, and do the general day-to-day admin.

Steady Rental Income

A long-term tenancy will bring in regular and steady income every month. Because of this, you have greater assurance of cash flow and can make predictive models of future cash flow. While you will undoubtedly have vacancies, these will generally only occur at the end of a tenancy and you’ll only have to go through the process of finding new tenants once a year. The average vacancy rate in the UK is approximately 4%.

Less Day-to-Day Management

Anyone that’s been a landlord for any length of time will tell you running rentals isn’t passive. However, compared to short-term rentals, as long as you do your due diligence when finding great tenants, most long-term tenancies are fairly subdued. Good tenants will pay the rent on time, make little fuss, and treat their accommodation like their home.

Easier Mortgage and Insurance Options

Often mortgage lenders will need to commit you to rent your property out as a short-term let.

Most lenders though will need assurance that the cash will keep flowing and greatly prefer long-term tenancies for this reason. As such, loans for investing in short-term holiday lets can be harder to obtain.

Disadvantages of Long-Term Lets

And the downsides?

Stricter Legal Requirements

As of 2025, long-term lets must comply with:

• Annual gas safety certificates
• EICRs (Electrical Installation Condition Reports) every 5 years
• EPCs of E or above (soon C-rated minimums are being discussed for 2028)

Not to mention Right to Rent checks, HMO licensing requirements, electrical and fire safety, and more.

Failing to ensure that all obligations are met with a long-term tenancy, legal or otherwise, could easily result in hefty fines at best.

Potentially Lower Yields

You’ll likely earn less per month compared to a busy, well-managed short-term rental , but what you lose in rent premium, you often make up for in stability.

Tenant Risk

Problem tenants (rent arrears, damage, antisocial behaviour) can still happen. And post-Section 21 abolition, eviction processes are expected to be slower.

Related: What Landlords Need To Know About Evictions: England and Wales

Should You Choose a Short-Term or Long-Term Let?

If you want consistent rental income every month with the least amount of effort, then long-term lets are the preferred choice. 

However, this requires you to find great tenants and requires you to be extra diligent when it comes to fulfilling all of the legal requirements and obligations as a landlord.

Whatever you choose, being organised is critical. With Landlord Studio, you can stay on top of rent tracking, safety checks, lease management, and tax deductions,  all from one easy dashboard.

Create your free Landlord Studio account today, and spend more time growing your portfolio, not chasing paperwork.

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