Short lets vs long-term rental: compare what you keep

A higher nightly rate does not automatically produce a better result for the owner. Compare the same period, account for empty nights and subtract the costs each model creates.

Start with a realistic long-let baseline

Use a monthly rent supported by comparable properties and local agent advice. Allow for void periods and any letting, renewal or management charges. Include owner-paid insurance, repairs and other ongoing costs. A twelve-month tenancy assumption should not silently mean twelve months of collected rent.

Build the short-let scenario from the available nights

Multiply the nightly accommodation rate by the number of nights available and expected occupancy. Use a rate after expected refunds, excluding guest cleaning charges and refundable deposits. Owner stays, repairs and local letting restrictions can reduce the nights available.

Then deduct platform charges, the Workstay management fee (from 15%, subject to property assessment) and running costs. Include utilities, linen, consumables, maintenance reserves and local property charges where applicable. If guest cleaning charges do not cover the full turnover cost and related fees, include the shortfall. Furnishing, launch costs and major works need a separate budget.

A worked example—not a market forecast

Suppose a property could achieve £1,500 monthly long-let rent, 95% annual let occupancy, a one-off tenant-finding fee of 75% of one month’s rent plus 20% VAT on that fee (a £1,350 total), no ongoing management fee and £100 monthly owner costs. Annual gross revenue would be £17,100, leaving £14,550 after those entered operating costs. The tenant-finding fee is negotiable depending on the property; this example uses the standard rate.

At a £140 short-let nightly rate, 365 available nights and 65% occupancy, annual accommodation revenue would be £33,215. Deducting an illustrative 15% management fee, subject to property assessment, an example 15% platform fee and £450 monthly running costs leaves £17,850.50 before finance, tax and setup. The example platform fee is an assumption, not a quoted platform tariff.

The difference is £3,300.50 a year in this scenario. At 50% occupancy, the short-let figure drops to £12,485.00. Neither outcome is a forecast: a small change in occupancy, achieved rates or expenses can change which option comes out ahead.

Test the downside before deciding

• Run a quieter-season occupancy and nightly-rate scenario.
• Include an allowance for maintenance and replacements.
• Consider the cost of initial furnishing and time to recover it.
• Compare the owner’s workload and need for access to the property.
• Check local permissions, insurance and the correct tax treatment.

Request a property assessment to discuss your letting options with Workstay. Read our UK Airbnb tax guide before discussing the final figures with your accountant.