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Olympic gold: how landlords are cashing in on 2012
With close to a million visitors seeking accommodation near the capital during the Olympics, a short-term let could turn your home into gold mine
With close to a million visitors seeking accommodation near the capital during the Olympics, a short-term let could turn your home into a gold mine
Rental demand is strong but never more so than if you are prepared to rent out a property for the Olympic games next year. The event has precipitated a plethora of new websites aimed at landlords and tourists who will be in London for the games, as well as owner-occupiers who do not normally rent out their homes. Letting agents in London are also reporting unprecedented interest from both landlords and tenants.
‘All the hotels are now full during the Olympics and there is going to be such demand for accommodation,’ says Lucy Morton, letting partner at agents WA Ellis. ‘We are already seeing demand from both landlords and tenants and I expect rents to be at least six times the long-term rental level,’ she says.
She points out that landlords who usually let long term are making enquiries now so that they can let out their property for a year – but with no option for the tenant to renew, so that the property is available next summer for the Olympics. ‘I reckon there will be such a rush next March when people who have got tickets realise that they don’t have any accommodation and by then rents could be more than six times the normal long term rent,’ she says.
On the websites, two bedroom flats are now on offer for as much as £2,000 a week or more, while there are tenants looking for accommodation for parties of 20 or 30 people. Landlords who specialise in the student market could find next summer a moneyspinner. Students tend to rent from September to the end of June. Landlords who are prepared to opt for short-term lets while their property is probably empty during the long summer vacation could make a killing.
Not just London
Websites such as www.rentduringthegames.com, www.londonrentmyhouse.com and www.2012homerentals.com are just a few of the new online sites that have sprouted for the games – and you don’t have to have a property in central London to be eligible. Landlords are advertising properties outside London within reasonable distance of the Olympic Games east London venue as well as Weymouth where the sailing is taking place.
Sports like football will be played at sports stadia around the country so there could be demand in a wide range of geographical locations and the marathon take place in central London. Events take place as far apart as the Millenium Stadium in Cardiff to Hampton Court Palace, Old Trafford and Lords Cricket Ground which will host the archery event.
Fees for landlords to use the websites vary from £50 to list a property to £150, generally with an easy to operate self-listing format which allows you to upload pictures and full details. Some of the properties listed have already had over 200 hits. Rentals on average are £1,000 per week for each bedroom so two bedroom houses are on offer for around £2,000 or more a week while four bedroom homes are available at £4,000 plus depending on the area, ease of access to the Olympic venues and facilities offered.
Fees charged by letting agents will be higher as they vet the potential tenants – probably 10% of the rental charged. But the big advantage of these short term lets is that rent is paid in full in advance so there is no chance of default.
Given that the games will last for two weeks but many of the millions of visitors to London will want to go shopping as well, it could easily be possible to let a property for four weeks from, say 15 July to 15 August. Owner occupiers considering letting should bear in mind that tenants will expect all cupboards to be empty and personal possessions removed. This will entail considerable effort and probably the cost of hiring short term storage for clothes and other items.
Landlords who decide to opt for short-term rentals over the summer must check their insurance to ensure that it covers them for short-term letting. There may be an extra premium to pay. Homeowners who decide to let their homes will also need to check with their insurers as ordinary household contents insurance does not cover periods when the property is let at a commercial rent.
For landlords with central London properties which are already leased to tenants, the worry is that tenants too will have worked out that there is money to be made during the Olympics and that they will decide to take their summer holidays during the games – sub-letting the property while they are away. Given that a tenant is not likely to be as fussy about letting your property as you would be – and that the landlord will lose out – it might be wise to check tenants’ intentions. Morton suggests doing a landlord property inspection during the period of the Olympics to put tenants on notice that you are checking up on them.
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