Work out the best lettings strategy for your investment property.
Yangon is a popular holiday destination. On top of this, there are many people coming to the city for business purposes. If you own a property, this gives you the opportunity to consider letting it out on a short term basis to cater for this growing market and to potentially increase your rental yield.
A short term let can be a matter of days up to six months. Anything over this time frame is a long term let. Short term lets generate a bigger weekly rent than long term lets. But there is a good reason for this:
1. Longer void periods are likely.
A long term let guarantees rent for a whole period, whereas for a short term let the money may roll in thick and fast but there are likely to be times when the property is left empty with no income being generated. Project the rent over the course of the year and account for a void period in order to see which is the better option for you.
2. Management heavy.
Longer term lets involve less management than short term lets. This is because a high turnover of tenants for the property creates more cleaning, as well as meeting them to hand over keys.
3. Utilities need to be included.
Rents are higher for short term lets as they include utilities such as electricity, water and Internet. This is something else that you will need to manage for the letting. Plus on top of this, you cannot rely on tenants using these efficiency unlike if they were responsible for payment of usage. Therefore you will need to factor this into your costs.
4. Furniture needs to be provided.
Holidaymakers and business travellers will want to arrive at the door with just their suitcases. For short term lettings everything will need to be provided from towels, teaspoons, bedding and electrical items such as a television. This is not always expected for long term lettings.
5. Is it permitted?
Some districts and buildings do not allow short lets as this impacts the hotel trade. Therefore you need to be mindful that you are complying with local laws to avoid a hefty fine.