What Are Airbnb Long-Term Rentals? A Complete Guide.

Airbnb has totally changed the property industry, including how many of us travel and use our own properties. Now, the platform is responding to market demand for longer term stays, by offering longer term rentals to it's guests. This is great news for both Hosts (Property Owners) and Guests, as longer term stays were hard to find availability for on the platform up to now. Whether you're a landlord looking to rent out your property or a traveler in need of a long-term rental, the process of long-term rentals on Airbnb can be a bit different from traditional short-term rentals.

In this post, we'll look at the benefits of long-term rentals on Airbnb for both hosts and guests, what the process is, and some insights into maximising your earnings as a host.

Why Long Term Lets and Who Uses Them?

There are many scenarios when a guest will need a mid to long term stay, that short lets do not accommodate and longer term tenancies are too long or inflexible for.

• Contractors, travel nurses, business travellers, often need long term occupancy, but with some week to week, or month to month flexibility on the rental, depending on whether their contract is renewed or not or where their work will locate them to.

• People who are moving between homes are a large market for mid term to long term lets as often do not want to commit to a 6 to 12 month Assured Shorthold Tenancy Agreement in the UK, and do not want to stay in hotels for weeks on end while their sale or purchase goes through.

• Insurance relocations and Home Owners undertaking renovations on their main home need somewhere short term to live, before they move back into their main home

• Expats moving from abroad to settle in or back in the UK are also often seeking mid term lets while they secure longer term housing.

Benefits of Long-Term Rentals on Airbnb for Hosts

1. Higher Earnings

One of the most significant benefits of long-term rentals on Airbnb for hosts is the potential for increased earnings. Long-term rentals can generate more income than short-term rentals, as your occupancy will typically be higher.

2. Lower Costs

On a longer term lets, your costs are significantly reduced as there is less guest turnover, less cleaning costs and there are less 'void' (empty) periods on your calendar.

There are still options to include regular cleans during these longer term stays, and we would recommend that these are included in mid to long term stays. They keep the property maintained to a high standard and help identify any small maintenance issues that need to be addressed.

3. Avoid the 90 Day Rule Restriction for London

This one only applies to London hosts; if your property is in Greater London, you would be able to keep it on Airbnb and other booking channels like Booking.com by having stays in excess of 90 days, which are not included in the 90 day restriction.

By Hosting with Smarlets, we keep your property listed on all the major channels, including the longer term and mid term channels. This means your calendar is constantly synchronised, you never get double bookings and you maximise your total annual revenue.

4. Flexibility

Hosts have greater flexibility on the type of guests they accept for long term rentals and the length of the rental. Hosts can choose to accept guests on a month-to-month basis, or they can choose to rent out their property for a set period, such as a quarter or a year.

Benefits of Long-Term Rentals on Airbnb for Guests

1. Affordability

Long-term rentals on Airbnb can be more affordable than traditional short-term rentals, as guests are typically paying for a longer stay.

2. Flexibility

Long-term and mid term rentals on Airbnb also offer guests more flexibility in terms of the length of their stay. Guests can choose to stay for a month, a quarter, or even a year, depending on what they require. Now with this feature being expanded on Airbnb, the ease with which they can actually find a suitable long term rental is much greater.

3. A Home from Home

A long-term rental can provide guests with a sense of 'home from home' and some stability, which can be especially beneficial for those who are in between homes or for students and business travellers who are looking for temporary housing.

Process for Long Term Renting on Airbnb and Other Sites

Review Platform Guidelines

Airbnb has published some guidance for Hosts on Long Term lets, which you should familiarise yourself with.

One of the benefits of using Airbnb for this purpose is that everyone on the platform is already vetted to some degree, and you can also set your acceptance terms to only accept guests with positive reviews, or a number of reviews, or a profile picture, or all of these criteria

Also, depending on where the guest is from, Airbnb or Smartlets will collect payment from the guest, so you don’t have to worry about a rent check bouncing or having to receive certified funds for a security deposit. Instead, you can handle all of this through the Airbnb platform.

Still, it’s always better to know the laws governing tenancy in your area just in case an issue ever does arise.

Make sure you have up to date contracts

If you take a booking from a platform there will usually be terms and conditions associated with the booking.

If the booking comes from an agency, your management company or via your own website, you will definitely need a separate booking contract that includes some terms and conditions if one has not been provided. Ensure house rules and cancellation terms are included in this.

Clarify payment terms and deposits

For longer term bookings, you need to agree payment terms up front and include these in your contract, including any deposit payment and the conditions around refunds.

For multi month bookings, the most common arrangements are payments monthly in advance and payments in full, also in advance. We would never recommend that you take payment after a guest has checked in, unless it is backed by a major corporate guarantee. Even then, most major corporations expect accommodation to be paid upfront and not invoiced in arrears.

Market across multiple channels, including your own Direct Booking Website

Even if you have one unit, you should probably have a basic direct booking website. The commission you save from one direct booking could often pay for the entire website hosting cost for the year. Not only that, but direct bookings increase the likelihood of further direct bookings, since you can directly communicate and share contact details and promotions with guests.

There are many agencies that specialise in mid term and corporate bookings. Depending on where your unit is based, the specification, the number of units you have and how many nights per year are available to rent, will determine which agencies will be willing to list. For the larger agencies, they will normally not list just one or two properties, and they will not list shared properties, only entire properties.

Smartlets have a preferred partnership with a corporate booking agency, which means we manage many of the properties on behalf of the owners that list. If you have a property that may be suitable for corporate bookings, do get in touch.

Ensure cleaning is done regularly

For multiple reasons, it is highly advisable to include a weekly clean in your price. Your cleaners will be able to inform you quite quickly if there is anything that needs to be reported to you which you can raise with the guests, such as smoking, or any damage or works that need to be done. On top of that, the cleaner the place is maintained, the more guests tend to look after it.

Legal Considerations*

*The section below is based on publicly available information cited where possible, but is not intended as legal 'advice'. Please do your own due diligence and check with your own solicitor before relying on anything stated here or anywhere else.

This is based what is stated in the legislation, namely the Landlord and Tenant Act 1985

and case law, primarily Street v Mountford

1. Will this give the guest 'Tenancy' in my property

It is important to note there is a distinction, at the time of writing (November 2023), between a license to occupy and a tenancy.

Licence vs. Tenancy

A licence gives an individual personal permission to enter and occupy premises. If permission isn’t granted then entry and occupation would amount to trespass. What a licence doesn’t do is give any legal interest in the property or land. A licence can be for a fixed term or be a periodic licence. There are two different types of licence:

Bare licence - where you are given permission to live in a property. For example, if you are invited to stay with extended family

Contractual licence - where a licence is given under a contract. Under a contractual licence normally the person occupying the premises has to pay for the accommodation but the conditions for a tenancy are not created. The contract doesn’t have to be in writing as a contractual license can be created verbally.

Most Airbnb and OTA 'bookings' will generally be regarded and intended to be a licence to occupy, unless the requirements to fulfill a tenancy are met.

Landlord and tenant solicitors say that it isn’t always easy to distinguish between a licence and a tenancy agreement. However, you are more likely to have a licence where:

• There is no intention to enter into a legal relationship or create a tenancy
• You do not have the right to exclusive occupation of the property.

There are other factors in determining whether a tenancy has formed

Exclusivity of use

With a licence to occupy, the licensee is granted permission to use all or part of the property on a non-exclusive basis. This means that the owner of the property is also allowed to use the property at the same time.

From a legal perspective, the licensee does not have any legal interest in the property; just permission to make use of all or part of the property, subject to any reservations in the licence agreement.

With a tenancy agreement, the landlord grants exclusivity of occupation to the tenant. This means that the landlord cannot use or access the property without the tenant’s consent, subject to common exclusions found in a tenancy agreement, such as:

-the right to enter, with notice, to make regular inspections or
-the right to enter for emergency repairs.

If it is intended that exclusivity to use the whole property be granted, then a tenancy agreement is the appropriate document to use.

If exclusivity of just part of a residential property is being granted (for example a bedroom in an HMO), then either a licence to occupy or a lodger agreement (if the landlord or a close member of the landlord’s family lives at the property and some key rooms are shared, e.g. bathroom, living room or kitchen) is more appropriate.

Length of Term

It is common to use a licence to occupy:

• for short-term arrangements (say, up to 12 months), or
• where a fixed term is not acceptable, e.g. the owner gives permission to use and occupy the residential property on an ongoing monthly basis.

In such circumstances, the licence will state the amount of notice that either party must give to terminate the licence.

Note that if a licence lasts for a long time, the Courts might decide at some point it became a tenancy. Then any eviction process is more involved and the occupant has all the statutory rights of a tenant.