From long-term leases to holiday lets – why one landlord made the switch

Since launching in 2008, Airbnb has made it possible for everyone who owns a property to let it out to tourists and business travellers.

Take your pictures, pick your price and publish your listing – the website takes care of the rest. From a single room in a flat to an entire villa – now it’s all just a click away.

But is this something landlords and property investors should be thinking about?

We spoke to a Belfast landlord who’s converted his entire portfolio to holiday lets – and tripled his income.

John Young (who trades as JY Properties) has been a full-time landlord since 2005 and owns six properties – a mixture of houses and apartments - in the Antrim Road area of Belfast, as well as some in England.

During a visit to one of his Liverpool properties last year, John found all the hotels prohibitively pricey due to match day, so he booked an apartment through Airbnb.

He was surprised to learn his host didn’t live in the apartment, but had a small property portfolio rented out for holiday lets.

John explains, “He told me: ‘I’m a full-time landlord but I was fed up getting the houses wrecked, so this what I do now with some of them.’ I’ve had similar tenant problems before, so it got me thinking this was something I need to do.”

The first thing he discovered was that, unlike other parts of the UK, you need to be registered with the tourist board (Tourism NI) to offer short-term rentals.

The Tourism (Northern Ireland) Order 1992 prohibits anyone from providing or offering to provide tourist accommodation as a business (that is, overnight sleeping accommodation for tourists provided by way of a trade or business) unless there is a valid certificate issued by Tourism NI in force in respect of the premises. These regulations apply to all tourist accommodation categories.

Anyone who hasn’t registered could face a £2,500 fine, six months in prison – or both! Despite this, John says the majority of Belfast properties on the site appear not to be Tourist Board certified, and he feels this is down to people simply not being aware.

You can find out more and apply for certification here on the Tourism NI website.

Above: images of one of John's Belfast Airbnb properties.

John’s had only positive experiences with his switch to holiday lets so far. “In one house of mine I’d had really bad tenants, so when neighbours saw me renovating the house, they said ‘I hope you’re not putting someone in like that again!’

“After a few weeks of guests coming and going, the woman next door twigged on, and she was quite friendly towards them, even brought them in for tea! So the response from neighbours has been very positive.”

We’ve all heard city holiday-let horror stories – how does John avoid properties being rented for rowdy hen and stag parties?

“You can avoid that quite easily by offering a minimum two-night stay. That seems to cut out the partygoers – I only get holidaymakers from overseas.”

John uses two sites to advertise his properties – Airbnb and booking.com – with the former taking 3 – 4% commission, and the latter 15%.

As we reported, Belfast is in the middle of a hotel-building boom – but John doesn’t believe the new hotels will dent demand for his holiday lets.

“They like having the washing facilities and kitchen etc. and they don’t mind not being in the city centre. Northern Ireland is small enough that all the tourist attractions are accessible enough for visitors.”

The data seems to support him too – total tourist accommodation stock in Belfast has risen by roughly 13% since 2013, and non-hotel accommodation (including B & Bs, guest houses and self-catering) has consistently been higher than hotels by roughly 30% over those 4 years.

John’s final tip to prospective holiday-let landlords is to make properties characterful – no magnolia walls and beige carpets here – but keep to a budget for things like plates, cutlery, curtains, towels and bedding. “I do a supermarket sweep – between Tesco and George at Asda, I get most of what I need.”

HOLIDAY-LET PROS

• Potentially two to three times the income of traditional rental
• More likely to keep property nice – remember, you can review guests on Airbnb
• You can change your prices to exploit peak seasons
• Under the new tax laws, buy-to-let mortgage costs can still be off-set against holiday lets (read our article on the tax changes)
• You don’t need an HMO licence to rent a multi-bed property as a holiday let

HOLIDAY-LET CONS

• In a managed apartment block, renting a property for under three months probably breaks lease terms
• Very specific requirements for kitting houses out – blackout blinds, headboard on each bed, etc.
• Less guarantee of steady income than tenancies (although John tells us he’s fully booked until the end of August!)
• The shorter the stay, the more work for you – for every new guest the place must be returned to new
• No official channels to vet or credit-check guests, unlike long-term tenants

What do you think – do holiday lets appeal to you? Or would you be loath to part with a guaranteed year of income? Have you experienced the ugly side of holiday letting, or want to put the case for traditional tenancies? Get in touch!