Short-Term Let Opportunities in Off-Market Assets

Targeting Areas with High Transient Demand

Both HMOs and short-term lets rely on consistent tenant or guest turnover. Location selection is critical because of this.

HMO demand drivers

HMOs perform best in areas with sustained demand from renters who value affordability, flexibility, and proximity to employment or education. Typical demand drivers include:

• Universities and further-education institutions

• Teaching hospitals and large healthcare campuses

• City-centre employment hubs

• Infrastructure and regeneration corridors

ONS Private Rental Market statistics show sustained rental demand and rising rents across the private rented sector in many urban areas, which matches broader evidence that occupancy is strong where pricing is competitive.

Northern cities such as Manchester, Leeds, Liverpool, and, in the Midlands, Birmingham continue to see particularly strong private rent growth, supported by ONS regional rental growth data. For example, average rents in Manchester rose year‑on‑year at 3.9% to around £1,330 in late 2025. Read our comparison of off-marketing property investment across these northern citites.

Local authority policies, including additional licensing schemes and Article 4 Directions that withdraw permitted development rights for HMO conversions, vary significantly by council. Investors should review official HMO licensing guidance relevant to their target area before acquisition.

Short-term let demand drivers

Short-term rental performance is influenced by a different, though overlapping, set of factors:

• Tourism and cultural activity

• Business travel and events

• Proximity to transport hubs

• Seasonal demand patterns

Data from ONS tourism and overnight visit statistics shows that domestic travel continues to support demand for short-term accommodation in regional UK cities, particularly outside traditional holiday destinations.

Off-market sourcing can be particularly valuable for short-term rental investors, as many desirable properties circulate privately through networks or direct owner relationships, often because owners prefer discretion or targeted negotiations over open marketing.

Maximising Returns Through Design and Setup

HMO-specific considerations

Design decisions have a direct impact on rental income, tenant retention, and operational efficiency.

Key value-drivers for HMOs are:

• En-suite bedrooms, which typically command higher rents

• Durable finishes suitable for high-usage environments

• Balanced room sizes, avoiding under-performing units

• Soundproofing, improving tenant satisfaction and reducing turnover

Research from BuyAssociation shows that renters are willing to pay more for features such as reliable broadband and good storage, highlighting their importance in shared accommodation.

Short-term let optimisation

Short-term rentals operate more like hospitality assets than traditional lets. Income performance depends on nightly rates, occupancy, and guest reviews.

Features that support higher returns include:

• Flexible sleeping arrangements

• High-quality furnishings and finishes

• Smart access systems

• Reliable Wi-Fi and workspace provision

In the short-term rental market, well-presented properties with strong guest reviews are typically better positioned to achieve premium nightly rates and high occupancy.

Management Options: Self-Manage vs Agency

Self-management

Self-management can maximise net income but requires a significant time commitment. Responsibilities are typically:

• Tenant or guest communication

• Maintenance coordination

• Compliance tracking

• Cleaning and turnover logistics

For short-term lets, this effectively constitutes a hospitality operation. For HMOs, ongoing oversight is required to manage shared living dynamics and regulatory compliance.

Professional management

Professional lettings management reduces operational burden and compliance risk but comes at a cost. Full-service short-term let management fees typically range up to 25% of gross income, while HMO management fees often sit above standard buy-to-let rates due to increased complexity. This approach aligns with RICS guidance on residential property management standards.

Compliance and Local Regulations

Mandatory HMO licensing applies to properties housing five or more occupants from two or more households, with many councils extending licensing to smaller HMOs as well.

Investors should confirm obligations via government guidance on Houses in Multiple Occupation and local council licensing portals.

Short-term let regulation is evolving rapidly. Investors should monitor updates published through official planning and housing policy guidance, particularly around registration schemes and local authority controls.

Final Thoughts

Short-term lets and HMOs can certainly deliver significant income returns, particularly when paired with off-market acquisition strategies that improve entry pricing and structural flexibility.

These models should be approached as operational businesses and executed with discipline, supported by sound location analysis, compliance awareness, and realistic management planning. When investors get these right, off-market short-term let and HMO investments can form an excellent, scalable component of a diversified UK property portfolio. Talk to Elite Realty for tailored advice in off-market investment.