Owning a short term let in London

[CatWomantotheRescue]

DH and I love to go to London for concerts, theatre, etc but hotel rooms for our long weekends feel like throwing money away. We are thinking about purchasing a small flat in London that we could let out most of the time, but use ourselves when it isn't occupied. Is this a reasonable good idea?

We are considering buying a studio flat in somewhere in zones 2 or 3. Our budget would be small - about 210k but this is just for a pied a terre rather than a place to live permanently. Rightmove searches seem to indicate there are some places available in this price range.

We would be able to pay the mortgage on this flat plus the mortgage on our own home plus council tax on both without much difficulty and without having to rent the London flat out. Our jobs are stable. However we would prefer to let the London flat out on a short term basis up to about a month at a time via an agency. We would hope he revenues from this would make up 50-75% of the mortgage payments but if they didn't we could still manage. We would also have some funds set aside for repairs, etc.

The goal would be to eventually own the studio in London mortgage free and we could stay there as much as we like when retired. However we've never rented out any property before and have never owned more than our own home. I'm wondering whether this plan is viable at all and whether I'm overlooking anything? Thank you.

Whereabouts are you seeing things for £210k in Zone 2! Genuinely curious as am half looking around this price range myself and had resigned myself to Zone 3, or even further out.

I don't know much at all about short lets but we're in eastern Zone 2 and regularly get fliers from the major agents who are looking for temporary lets for people in town on short term business contracts - presumably city/canary wharf workers. Not sure how serious they are, but that might be worth looking into.

Another option would be air bnb, which can work but you'd need someone to manage the property, change linens etc and I'm not sure if that'd be too much faff. Also possibly tricky to get something that would rent well on air bnb on your budget. But the return can be very good, if you get it right.

Thanks, shaska. There are even studios in zone 1 for that price, near Lambeth for example and I've even seen one near Kensington listed! But these are small studios, not places that would be great for a primary residence if you can get something larger further out.

what you are planning is really a holiday let, so you need an agency that deals with those, not a standard rental agency.

the advice I had (for a place outside London) was to work on occupancy of 20 weeks per year. May be radically different in town of course. There are also some interesting tax issues, look up 'furnished holiday lettings'.

standards of furnishing and cleanliness need to be very high, it is a demanding business.

when i looked at it I saw that agencies charge a fair whack of the income for short term let in London (as much as 40%) and you need high end furnishings towels sheets etc to make it worthwhile...also charges for cleaning etc.