In today’s property market, landlords are increasingly exploring short-term rentals such as Airbnb or serviced accommodation, as an alternative to traditional long-term tenancies. While the model involves more management and upfront investment, the potential for superior cash flow is undeniable.
Let’s explore why letting your property on a nightly basis can outperform a standard tenancy agreement, and what factors you need to consider before making the switch.
1. The Cash Flow Advantage: Higher Income Potential
The biggest appeal of platforms like Airbnb, Booking.com, and other short-stay options is simple:
you can charge more per night than you’d ever achieve per month through a long-term tenant.
For example:
- A 1-bed apartment that rents for £1,000/month on an AST (Assured Shorthold Tenancy) could earn £80–£120 per night as a short-term let.
- Even with a conservative 70% occupancy rate, the same property might generate £1,600–£2,500 per month before expenses.
That’s a 40–150% uplift in gross income potential.
2. Furnishings and Presentation Matter
Unlike long-term rentals, short-term lets must be fully furnished and equipped — think hotel standards rather than bare essentials.
High-quality furnishings, comfortable beds, and stylish décor not only attract more bookings but also allow you to charge higher nightly rates.
Tip:
Invest in durable, mid-range furniture that photographs well. A well-presented property can outperform an average one by 20–30% in nightly income.
3. Location, Location… and Target Market
Your property’s location and target audience are critical to cash flow consistency.
- Contractor and business stays: These guests typically book during weekdays, often for multiple weeks, and provide more stable year-round occupancy. Ideal locations include cities, industrial areas, or near major transport links.
- Holiday lets: These thrive in tourist hotspots, coastal towns, or scenic countryside areas. However, they can be highly seasonal, meaning higher summer income but quieter winters.
A smart landlord identifies who the property best serves and tailors pricing, furnishings, and marketing to that audience.
4. Seasonality and Dynamic Pricing
Short-term letting income fluctuates — but that’s not necessarily a bad thing.
With the right pricing strategy, you can maximise revenue during peak seasons and maintain competitiveness in slower months.
Tools like Airbnb’s Smart Pricing or third-party systems (e.g. Beyond, Pricelabs) allow you to:
- Increase rates for weekends, holidays, and local events
- Offer discounts for longer midweek or off-season stays
- React instantly to demand changes in your area
This flexibility is something long-term rental income simply doesn’t offer.
5. Costs and Considerations
Of course, higher cash flow comes with higher expenses and management requirements:
- Furnishing & setup costs
- Utilities, internet, council tax (usually included)
- Cleaning and laundry between stays (this cost is usually past on to the guest on booking)
- Platform commissions (Airbnb, Booking.com, etc.)
- Management fees, if using a serviced accommodation company
Despite these costs, many landlords still enjoy net cash flow 30–70% higher than traditional lets, especially in high-demand areas.
6. Flexibility and Control
With Airbnb, you can decide when and how often your property is available.
This flexibility is ideal for landlords who:
- Want to use the property themselves occasionally
- Prefer short-term guests over long-term commitments
- Need a buffer between tenancies without losing income
In contrast, a long-term tenant means fixed rent and limited flexibility, even if the market changes.
Conclusion: Is Airbnb Right for You?
Airbnb and short-term letting can deliver significantly better cash flow than a traditional tenancy — if managed correctly.
Success depends on:
- A strong local demand (contractors, tourists, or professionals)
- Attractive presentation and amenities
- Active management or a reliable serviced accommodation partner
For landlords willing to take a hands-on or well-managed approach, the rewards can be substantial.
In the right area, nightly rates outshine monthly rents, providing a steady stream of bookings and an enviable cash flow advantage.
Final Thought:
Airbnb isn’t a “get rich quick” strategy — it’s a business model. But for landlords who treat it as one, the results can transform their portfolio performance and financial freedom.