The short-let market boom is real, and many landlords and investors are reaping the benefits of the UK’s tourist and business accommodation industry to increase their property yields. While currently a very profitable model, it comes with its own challenges and pitfalls. We sat down to speak to Ahmed Khan, who has quickly build a portfolio of properties in the serviced apartment and short-let markets, and asked him to share some key takeaways from his time as a property manager and a public speaker, having engaged with hundreds of landlords.
HW • Hi Ahmed! How did you start in the short let market?
AK • I was interested in getting involved in the property market for some time but after doing some research, I realised that the established property investment models such as Buy-to-Let were very slow and did not produce a very high return. A lot of the traditional strategies are designed to help you achieve wealth over a long period of time, as opposed to cash now to live on.
So I started looking at other ways to make money from property and came across the short-let model. Since the end of 2016, I have been leasing properties and letting them out as short-let properties. If you can find areas with good margins between the rent you’re paying and the nightly rate you can charge, it can be a very lucrative strategy.
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HW • What were your best and worst decisions when preparing your first property?
AK • The best decision I made was to invest in a design process. In the short-let market, you want your property to look well-designed and stand out vs. competitors to maximise the number of bookings you receive.
The worst decision I made was taking too long to design the apartment. The longer you spend designing the apartment, the more money you are losing from not having a live listing. In an ideal world, I should have started the design process as early as possible in order to get the highest yield-generating design live quickly - which is why Homewings is such a great solution to anyone looking for a rapid redesign without compromising quality.
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HW • What are some useful tools that help your property management process?
AK • The most useful tool a landlord can use for the short-term business is a channel manager. The one I use is called Guesty. This will do the majority of the work for you and I believe it's an absolute necessity if you want to remain sane in this business! For example, Guesty will send the checkin and checkout instructions to guests, take payment from guests, schedule cleans for the cleaners and deal with the majority of the guest communication. It has reduced my time input significantly.
HW • Would you prefer to use a management agency or manage your properties yourself?
AK • I personally self-manage all my properties but then again this is a full time business for me. If you don't have the time to manage then the first thing you should do is put in all the systems, like channel managers, to drastically reduce your time input. If after that, you still think the workload is too much for you, then provided the numbers work, you can get a management agency which will do everything for you. If you’re going to use an agency, tell them to send you some links to other properties they manage and see the sort of reviews they've been getting - the reviews will generally tell you how good their management is.
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HW • How would you advise someone on choosing between short- and long-let?
AK • If you want to make the most money from your properties then generally short-letting a property will almost always generate a higher return, compared to if it was on the long-term let. However, if you want your property investment to be 100% passive and not have to deal with anything then first you should consider using a short-let management agency as they will do all the work for you, and you will still receive a higher return than you would on a long-term model. So you get the benefit of a higher return, without any more work - so there is no risk!
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HW • What's next for you?
AK • Up until now, I have always leased properties, which I have then rented out on a short-term basis. The strategy is absolutely amazing for cashflow, however, you don’t benefit from any capital appreciation as you do not own the property. So my plan going forward is to start buying properties, so I get the benefit of both high cashflow from the properties I don’t own, and capital appreciation from the ones I do own.
As a property investor, you ideally want both cashflow and equity and striking a balance at times can be hard. But combining these two strategies will help me achieve this. Aside from this, I am also a public speaker and I speak at events throughout the country about investing in short-let properties, business and sales and help others achieve the same results that I have achieved.
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More on Ahmed Khan’s work here: https://www.ahmedkhan.co
If you're interested in redesigning your space specifically for the short-let space then get in touch here and find out how Homewings can help you differentiate from competitive listings in your area to increase your nightly fee and occupancy rates.