Against the backdrop of Brexit, landlords and tenants alike are sharpening their focus on breaking down the traditional rental model to give way to greater opportunity to thrive in the current rental landscape.
This demand calls on the market to offer more flexible options to provide greater variety to meet the changing needs of tenants.
With a rise of corporate contract workers and homeowners undergoing renovations, the need to service tenants with more adaptable rental models has never been so important.
A hybrid rental model combining short, medium and long-term lets offers a solution to this need. The lucrative returns and growth of the Airbnb ‘sharing economy’ are a welcome asset in the mission for getting the best return on investment in the current complex housing market.
The changing face of employment and thirst for flexible living means the rental market will continue to be a stronghold and property owners should look to adapt their assets to reflect the wants and needs of modern-day tenants.
This is especially timely given England is set to be the world’s second best tourist destination in 2020 and alongside a weaker pound, the stage is set for longer-staying travellers to become a valuable new tenant.
On a short or medium let agreement, travellers looking to extend their tenancy contracts bi-weekly or monthly within the 90-day limit, have more leeway to enjoy a home experience while feeling secure when circumstances change.
As more landlords put their flexible rental strategy into place, the network of a tenant blend will continue to grow, and longer-term travellers or foreign contract workers will become a more common demographic for landlords to serve in a secure and efficient manner.
The stage is clearly set for a flexible lettings solution for property owners to meet the demands of the tourism market and maximise their rental yield while switching to medium and long lets to provide housing stock for local demand.
Recent years have provided a promising learning ground when navigating the evolving rental landscape. It has given all market operators, particularly property management companies, the chance to restore the bridge between homeowners and tenants.
Standards matter. Change in rental models must be coupled with secure, global benchmarks in order to improve transactions between landlord and tenant. It is high time to ensure both participants of the contract, whether it is short or long-term, are having their needs handled appropriately.
While this is a nuanced challenge, if approached correctly flexible rental models can have a positive impact on the housing market, improve tourism and add more dynamic offerings to temporary accommodation.
In stark contrast to traditional rental models landlords are often pressured to endure today, flexible rental models particularly in global hubs such as London, Dubai and New York, allows homeowners to grant permission to multiple tenants across the year helping to gain differing perspectives on what aspects can help to improve the value and appeal of their properties.
Having more flexible rental models readily available is necessary to support the fast growth rates major global cities are seeing year-on-year. Take Dubai for instance, sources claim for every ten new homes placed on the market, up to three or four of them eventually are listed as holiday homes or short-term rentals.
Going into the New Year, we can expect to see thousands more properties listed across various cities and additional services are required to support this growth.
With this reality in sight, the need to professionalise short-term lets to ensure both homeowners and guests are protected could hold the key to opening up this market’s clear benefits.
Yet, it’s no secret that managing a short let is tricky practice, with a significant portion of time required to finding and managing with frequent changeover of tenants.
As 2020 approaches, more property owners will look towards integrating short-term lets in their rental model and subsequently will have to ensure their letting calendar remains full throughout the year. To support this rental landscape, services are available to absorb time-intensive and administrative processes while keeping in line with regulatory standards to protect tenants.
For this type of rental model to scale better, faster and more intuitively than before, best in-class technology will become part of the journey.
Industry-leading technology will provide access to dynamic property pricing algorithms to determine optimal prices for short, medium and long term stays and maximise rental yields.
The flexible rental landscape is heading in the right direction, but it is critical to have greater oversight to ensure guests are brought along to enjoy its benefits.
The right technology coupled with effective property management services across various regions will significantly increase the sustainability of flexible rental models to deliver a better and brighter future.
*Nakul Sharma is Founder & CEO of Hostmaker