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How Short-Term Rentals in Derby Can Make You Money
Short-term lets in Derby present a fantastic opportunity for property investors to generate passive income and build wealth. This is driven by its excellent location and strong demand for flexible accommodations.
Derby is well-suited to attract a diverse range of guests. By leveraging the city’s growing appeal a short-term rental property can become a lucrative investment.
Expected Rental Income in Derby
Let me provide you with a detailed analysis of how much rental income you can expect after investing in this city.
As of September 2024 the average monthly rent in Derby stands at £771. It reflects a substantial 10.2% increase from September 2023. This rise leaves behind the East Midlands average of 8.8%. However we have noticed that rental yield in Short-term apartments usually reaches higher than 20%. And this is a great opportunity for all the investors to maximise their profit.
Looking at the rental growth in Derby being an expert here is my suggestion for investors reading this.
The Mill
You should opt for this luxurious property in Derby. The property has 70 exclusive one and two bed apartments. It is located at the heart of Derby City. The site here is known as the “ Osmaston Works.” This area has a significant history in the manufacturing field.
£646 pcm
250 Years
Off-Plan
Q4 2025
Project Highlights
- The site reflects the area that hosts companies like Rolls-Royce, Bombardier and Toyota.
- Thoughtfully designed to accommodate the many different aspects of everyday life
- High-speed Wi-Fi
- Fitness centre
- Laundry room
- Prime Location and Connectivity
- Offers investors heritage and individualistic design that features to a traditional building.
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Initiate a powerful sequence of your property growth and reinvestment.
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Graduation House (15 miles away from Derby)
This off plan property will consist of 162 carefully designed and fully furnished luxurious apartments. It is purpose built plus self-contained and off-site accommodation.
Also it will offer various amenities including a bike storage plus high speed WiFi and a breakout games room with pool tables. These features will make this development an optimal option for all types of investors.
£737 pcm
999 Years
Off-Plan
Q4 2025
Project Highlights
- Comprises of 162 fully furnished apartments.
- Thoughtfully designed student apartments equipped with amenities tailored to student needs.
- Include comprehensive high-end amenities.
- It focuses on the PASA growing market.
- It is a self-contained and off-site accommodation.
Tudor (15 miles away from Derby)
This is one of the best opportunities for investors and homeowners. It comprises 20 meticulously designed units. Being 15 miles away from Derby this offers the investors a peaceful experience within the city life.
£650 pcm
6%
Ready-Now
10%
Project Highlights
- Comprises of 20 meticulously designed units.
- Only a 10% deposit is required, making it a more accessible entry point for investors.
- An 18-month payment plan is available, enhancing financial flexibility.
- Offers an exceptional living experience
- Provides a perfect opportunity for investors and homeowners alike.
Crown Works (12 miles away from Derby)
This area is projected to show 26% growth by 2035. With 74 meticulously designed units this development provides an exceptional living experience. It is a perfect opportunity for investors and homeowners alike.
£800 pcm
999 Years
Off-Plan
August 2025
Project Highlights
- It features 74 amazing spacious designed units.
- It offers a luxurious lifestyle suited for both investors looking for something special close to Derby.
- Each apartment has been crafted to support diverse aspects.
- This property is steeped in heritage with Victorian-era breweries and Georgian architecture
- It feels like one of a kind to deliver culturally rich living environment.
Look at the rising rental prices of Derby as stated by the Office for National Statistics.
Source: Office for National Statistics
Due to the arrival of COVID 19 there was a fall but the graph paced up by the end of 2023.
Serviced apartments and short-term let options in Derby are popular due to the city’s vibrant business and leisure activities.
These properties provide the perfect base for both leisure and business trips, offering easy access to surrounding locations while staying within reach of the city’s main attractions.
Guests appreciate apartments that come with a fully equipped kitchen, cosy space, and amenities such as sofa beds and parking, ideal for family stays or business trips.
Such rentals offer the convenience of cooking tenants their own meals. Your tenants can get a practical alternative to dining out. This adds value to their longer stays.
Looking ahead to 2025 the demand for rental properties in Derby is forecasted to remain strong.
The cost of buying property is continuously rising. With this more people are looking for quality rental options. Along with this over 7,000 people are currently waiting for council homes. Hence the appetite for rental units is clear. The city’s student population also adds to this demand.
Looking ahead to 2025 rental demand in the city is expected to remain strong. As property prices continue to climb, rental demand should grow alongside.
For tenants this type of property offers well-equipped apartments. Amenities like bathrooms plus sofa beds and on-site parking enhance the appeal. It ensures a comfortable stay that balances the needs of business and leisure.
As Derby continues its upward trajectory in the rental market, it offers both reliable rental income and future capital growth opportunities, making it one of the East Midlands’ top investment locations.
Areas with High Occupancy Rates
In Derby properties located in well-connected areas enjoy higher occupancy rates. This includes places like the city heart or those that are close enough to walk to restaurants and public transportation. Visitors like how convenient it is to stay in a cosy flat.
Also, those are great places to stay for both work and pleasure trips. A short drive to famous spots or nearby conveniences makes it even more appealing. With these attributes you can expect fewer vacancies and steady rental income. That too throughout the year.
Comparison Between Short-Term Let & Long-Term Let
| Feature | Short-Term Let (Airbnb, etc.) | Long-Term Let (Annual Leases) |
|---|---|---|
| Income Potential | Higher, especially in peak seasons and tourist-heavy areas | Lower, fixed monthly rent |
| Pricing Flexibility | High (dynamic pricing, flexible rates) | Low (fixed rates, adjusted annually or by lease term) |
| Occupancy Risk | Higher, with potential for seasonal vacancies | Lower, as tenants sign longer agreements |
| Maintenance Costs | Higher, with regular cleaning and repairs needed | Lower, as tenant turnover is less frequent |
| Management Effort | Requires more active management and guest handling | Minimal, with tenants handling day-to-day upkeep |
| Legal & Regulatory Risks | Potential for restrictions in some areas (especially urban locations) | Minimal, typically less regulated |
| Tenant Turnover | High turnover with short stays | Low turnover, tenants stay for longer periods |
| Investment Returns | Potentially higher, due to demand-driven pricing | Steady, moderate growth over time |
| Ideal Property Types | Vacation homes, urban apartments, and properties in tourist areas | Family homes, suburban rentals, and commercial spaces |
Analysis:
Profitability: Short-term lets offer significantly higher profit potential by leveraging peak season rates and dynamic pricing.
Flexibility: They provide more control over pricing and occupancy, allowing for maximised returns during high-demand periods.
Risk Consideration: While they have higher management needs and regulatory risks, the profit potential in desirable locations often outweighs these challenges.
Why Derby is a Great Place for Short-Term Rentals
Investing in short-term lets in Derby makes perfect sense for those looking to maximise their returns. This is one of the best choices for those too who are planning for long-term investment growth.
The city combines a thriving business environment with excellent connectivity and amenities. After helping thousands of investors now I believe that Derby is a perfect choice for guests. Especially if they are the ones who value convenience, comfort, and practicality.
Better Earnings Compared to Long-Term Rentals
Short-term properties in Derby, such as serviced apartments near the city centre or within Short-term properties in Derby often command higher nightly rates than traditional long-term rentals.
This includes serviced apartments near the city centre. And within walking distance of key locations like Derby Train Station and Derby Arena. These properties offer flexibility to guests.
This is via a cosy sofa bed for an overnight stay in spacious accommodations. This also includes multiple bathrooms for longer trips. A well-equipped apartment with features like a fully equipped kitchen or easy parking.
All these features stand these properties out in the market. These are appealing to those tenants seeking comfort and the ability to prepare their own meals. This unique offering ensures consistent bookings. And it leads to higher annual earnings for investors.
Flexibility to Adjust for Seasons
One of the standout benefits of short-term lets I feel is the ability to adapt to seasonal trends. I feel that one of the standout benefits of short term lets is the ability to adapt to seasonal trends.
Derby’s location near the East Midlands Airport and leisure spots make it ideal. That too for both weekday business trips and weekend leisure stays.
The city offers easy access to attractions and transport links. With these features investors can optimise rates during high-demand periods. Such as local events or holiday seasons.
This adaptability ensures that your property remains a perfect base for all kinds of tenants. Either they are exploring the city or attending meetings.
Tax Savings and Other Benefits
Owning a short-term let in Derby also comes with potential tax advantages. The Furnished Holiday Let status allows you to claim certain deductions. And helps you to reduce the overall tax burden.
They also get benefits from capital allowances on furniture and appliances. But remember you need to be eligible to get these advantages.
We have attached here the updated Furnished Holiday Let Guidance from the UK Government. You can get all the related information here Updated Helpsheet- Furnished Holiday Lettings.
The constant flow of guests keeps the property well-maintained, contributing to its long-term capital appreciation.
With its strategic location the city has a strong demand for short-term accommodations. These properties have the ability to cater to both business and leisure trips. Derby offers a lucrative opportunity for those serious about building a successful property portfolio.
Downsides of Short-Term Rentals in Derby
Investing in short term rentals in Derby offers plenty of potential for passive income and capital appreciation.
It is important to think about the problems. Especially the ones that come with taking care of these things. Knowing what could go wrong can help you make good plans and avoid shocks.
Changing Demand Throughout the Year
The number of people looking for short-term rentals can change with the seasons.
They can also keep on changing depending on local events and business activity. For instance properties near Derby Train Station or the city centre tend to see spikes in bookings during major events or holidays.
But during quieter periods such as off-seasons or post-holiday slumps the occupancy can drop. This means it requires active management. And you might need to adjust your pricing dynamically to attract tenants.
Extra Costs for Maintenance and Tenant Changes
Short term rentals often involve higher maintenance costs compared to long term rentals. Frequent guest turnover means more wear and tear on bathrooms plus kitchens and furnishings.
Keeping a cosy Derby apartment in top condition requires regular cleaning. This also requires repairs and updates. Because all these elements ensure it remains a popular choice.
Features like a fully equipped kitchen and a comfortable sofa bed are expected to be spotless and functional. The costs can add up fast. It takes time and maybe even professional help to market the property and keep track of the listings.
Following Local Rules and Laws
It can be hard to figure out the rules in your area for short-term rentals. There are rules in Derby about homes that are rented out for short periods of time. Not following the rules can lead to big fines or other legal problems.
The Derby City Council says that all issues must be dealt with, ranging from safety rules to zoning limits. This ensures that your short-term rental in Derby follows the law. It will save you time and trouble in the long run if you know these rules before you start.
Short-term rentals in Derby are a fantastic investment, but recognising and addressing these challenges is key to long-term success.
Best Way To Start Your Short-Term Rental in Derby
Growing your rental income by handling all the day-to-day logistics is tiring. We understand that. Therefore we always suggest investors to hire a property manager.
This one step can be a game-changer. Property managers handle everything from guest check-ins to cleaning and maintenance, freeing up your time to focus on scaling your portfolio or simply enjoying more personal freedom.
In Derby several property management companies specialise in short-term rentals. A local company often brings valuable insights. This includes understanding the peak rental seasons along with knowledge of local pricing trends.
However, be mindful of the costs. Most managers charge a percentage of the rental income. So weigh up the costs against the time and stress they can save you.
If you want to hire the best property manager, look for someone who knows what you want to achieve. Some buyers put getting the best price for each night at the top of their list.
While others work to keep rental rates high. Help your plan work with a manager who can change with your stock as it grows. A good partner can make managing your short-term rental almost effortless. You can get the rewards without having to work hard all the time.
Conclusion
Considering short-term lets in Derby could be a smart move. That is if you are after flexibility plus strong returns and adaptability to seasonal demand. You can cater to a range of tenants looking for both convenience and comfort.
Especially with serviced apartments in prime spots near Derby Train Station or within walking distance of Derby Arena.
The city’s mix of business opportunities—think Rolls Royce nearby—and leisure attractions makes it a popular choice for those who value a perfect base with easy access to both work and relaxation spots.
One major advantage is that short-term lets typically bring in more income than traditional rentals. A well-appointed Derby apartment with a cosy sofa bed, ample space, and even essentials like parking or a fully equipped kitchen goes a long way in boosting your property’s appeal.
And if the property is close to the East Midlands Airport or the city centre, you’re tapping into a steady demand for short-term stays.
You are not locked into a single pricing model either which is a huge benefit. Adjusting rates for peak times allows you to maximise revenue. It can be during holiday seasons or events at the Derby Arena and busy weekends.
This flexibility to adapt makes short-term lets ideal if you are aiming to get the best price for each night.
Of course managing a short-term rental does come with challenges. Starting from handling maintenance between tenants to navigating Derby’s local regulations.
But with the right setup and possibly a reliable property management company you can make it smooth. And it can be a rewarding experience. In the end a well-maintained short-term let in Derby can serve as more than just a source of passive income.
It is a solid investment that grows in value over time. That too all while meeting the needs of diverse guests.
Investing in short term let Derby properties offers a profitable alternative to traditional hotel rooms, providing guests with the comfort and flexibility of a fully equipped space, ideal for both short and extended stays in this vibrant city.
Located near popular attractions like Intu Derby, Borrowfield Lodge, and Mercia Marina, short-term let properties in Derby provide guests with convenient access to both leisure and business hubs, enhancing their appeal for investors seeking high occupancy and rental returns.
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