The downside to Olympic short lets in London
- 15th March 2012
- Buy-To-Let Property News
Are Olympic lets worth the hassle for buy-to-let landlords?
London landlords with properties close to the Olympic site have been in-undated with offers promising huge returns for short term lets during the games.
It was reported that one Central London property is expected to fetch a record rent of £433,000 per month as its landlord(s) cash in on demand for space during this summer’s games.
But there are several risks assocated with these Olympic lets that buy-to-let landlords should be aware of before agreeing to a short-let:
• Huge rents may be offset by agencies who are charging high fees for securing tenants
• Some agencies are also charging a premium for the additional administrative work they will have to carry out
• With many tenants coming in from overseas, landlords will struggle to assure the quality of their tenants; cross border reference checking may be a costly and futile process
• For the same reason, landlords may struggle to get an effective deposit from tenants who are only in the property for a matter of weeks; this could lead to expensive problems if anything goes wrong with the property
• Short term renters expect high quality spec in a property which is expensive; the cost of upgrading old furniture or fittings is likely to add up quickly, if not in place already
• With so many short-lets ending around the same time the rental market is sure to be flooded with properties after the Olympics. Some landlords may struggle to find a subsequent long term let and could face some void periods
Stephen Ludlow, Chairman of ludlowthompson, says: “Olympic lets may seem like a great cash opportunity for London’s buy-to-let landlords, but those thinking about it should seriously consider whether the returns justify the risks.”
“Returns may look attractive on paper, but there are sure to be costs associated with preparing your property beforehand, and landlords could be in for a nasty shock if the property is left in a bad state or they struggle to secure a tenant once the contract has lapsed.”
“Anyone considering a short-let during this summer’s Olympic games should discuss the pros and cons with a reputable agent beforehand and ensure that they know the full cost and risks up front.”
Anyone considering a short-let during this summer’s Olympic games should discuss the pros and cons with a reputable agent beforehand.
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