A word about Emily
Emily is 31 years old and owns a 1-bedroom apartment that she bought 5 years ago for £420.000, 80% of which was financed by a loan from the bank. Every month, she repays £1428. When Emily had to relocate to Paris in September 2014 for work, she wanted to keep her London apartment, so she rented it out as a standard furnished rental for £1290 a month, excluding expenses. Her goal was to auto-finance part of her loan and to hold on and add value to her property. Her company was paying for her housing arrangements in Paris.
The issues that came up
The first problem Emily had to face was finding a tenant. She turned to a traditional rental management agency, but after application refusals and rental offers at prices well below what she was looking for, Emily lost 2 months of rental fees before finding a tenant willing to sign a one-year lease.
Despite the fact that she was assured of a steady income, Emily was somewhat frustrated by the idea that she wouldn't be able to use her apartment when she returned to London from time to time. On top of that, the prospect of having to find a new tenant every year scared her a bit, not to mention the fact that her current tenant could easily leave her high and dry. Non-payment was also a constant worry and the resulting loss could have quickly become a huge financial burden, especially given the bank loan she had to repay.
Her tenant ended up breaking off the agreement at the end of the contract.
The choice of a short-term rental
Emily had already thought about Airbnb, but she was well aware of the extra work it would be (replying to messages and booking requests, welcoming guests, cleaning services, laundry, maintenance, rental fee management, etc.). She already had a full-time job and the distance between her new workplace and her apartment would have made it even more of a hassle.
Emily heard about Luckey Homes through a friend of hers in Paris who had offered her main residence as a short-term rental during the half-term holidays.
Consequently, Emily asked us to step in to help her rent her London apartment through platforms specialised in short-term rental. After all, what did she have to lose? If it didn’t work the way she wanted it to, nothing would keep her from switching back to the traditional rental system; especially since Luckey Homes doesn't require any sort of commitment.
After a slow start in the 3rd quarter of 2015 (average monthly net income of £1200), Emily saw her income gradually rise. Her listing also began appearing on first page, thanks to the positive reviews from her guests.
Over the year 2016, Emily was able to clear a monthly net income of £2100 a year. This was a 60% increase over what she earned through a standard rental (she still pays for the water and electricity bills and the council tax). With all the positive comments on her listing, her average income should continue on its upward swing next year.
Emily’s apartment is now auto-financed by her short-term rentals. And she has also been able to go back home several times whenever she wanted - all she had to do was to close the dates on her Luckey Homes app.
In short, it was a very positive experience for Emily, and her short-term rentals proved to be easy and totally hassle-free.