A word about Emily
Emily is 31 years-old and owns a 1-bedroom apartment that she bought 5 years ago for £420.000, of which 80% was financed by a bank loan over 25 years. Every month, she repays £1428 to the bank. When Emily was transferred to Paris in September 2014 she wanted to preserve her assets, so she rented out her apartment 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, as her company was paying for her housing arrangements in Paris.
The issues that came up
The first problem Emily had to face: the search for a tenant. She finally turned towards a traditional rental management agency. Between 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 would not be able to use her apartment as a home base 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 leave her high and dry. Non-payment also represented a constant threat and the resulting financial loss could have quickly become a huge load to carry, especially when there is a bank loan to repay.
Her tenant ended up breaking off the agreement at the end date of the contract.
The choice of a short-term rental
Emily had already given some thought to Airbnb, but she was well aware of the time she would have to devote to this type of activity (replies to messages and booking requests, welcoming guests, cleaning services, laundry, maintenance, rental fee management, etc.), all this despite her full-time job. The distance between her new workplace and her apartment was another major drawback.
Emily heard about Luckey Homes through a friend of hers in Paris who had offered her main residence as a short-term rental during half-terms.
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 as Luckey Homes does not 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 along with her listing appearing on first page, thanks to the good reviews she got from her guests.
Over the year 2016 as a whole, Emily was able to clear a monthly net income of £2100 a year, which represents 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 when she needed or wanted to: all she had to do was to close the dates on her Luckey Homes app.
In short, it was a very successful experience for Emily who won on all counts, and her short-term rentals proved to be easy and totally hassle-free.