Serviced accommodation, also known as extended-stay accommodation, is a type of accommodation that offers the flexibility of a hotel with the comfort and convenience of a home. Have you ever stayed in an Airbnb? This is a serviced accommodation. Serviced apartments are typically furnished and equipped with all the essentials, such as a kitchen, bathroom, and Wi-Fi.
They can often also offer additional services, such as housekeeping, laundry, and 24/7 reception.
Serviced accommodation is becoming increasingly popular in England, as it offers a number of potential benefits for buy-to-let landlords, including:
Pros of running serviced accommodation:
Higher rental yields: Serviced accommodation typically generates higher rental yields than traditional buy-to-let properties. This is because serviced accommodation is in high demand from a variety of tenants, such as business travellers, contractors, and families on vacation.
Less tenant turnover: Serviced accommodation tenants tend to stay for longer periods of time than tenants in traditional buy-to-let properties. This reduces the risk of void periods and the associated loss of rental income.
Reduced management workload: Serviced accommodation operators typically take care of all the day-to-day management tasks, such as housekeeping, maintenance, and guest check-in/check-out. This frees up landlords' time so that they can focus on other aspects of their business.
Cons of running serviced accommodation:
Higher upfront costs: The initial costs of setting up a serviced accommodation business can be higher than the costs of setting up a traditional buy-to-let property. This is because landlords may need to invest in furniture, appliances, and other amenities.
More complex compliance requirements: Serviced accommodation businesses are subject to a number of complex compliance requirements, such as fire safety regulations and licensing requirements. Landlords need to make sure that they are fully aware of all the relevant requirements before starting a serviced accommodation business.
Greater risk of damage: Serviced accommodation is more likely to be damaged than traditional buy-to-let properties, as they are used by a variety of different tenants. Landlords need to have a robust insurance policy in place to protect themselves against the risk of damage.
Conclusion
Serviced accommodation can be a rewarding investment for buy-to-let landlords. However, it is important to weigh up the pros and cons carefully before making a decision. Landlords should also make sure that they understand the compliance requirements in their area.
If you are interested in how we can offer Serviced Accommodation management with our hassle free service, please book a no obligations consultation call to see if your property fits our criteria.
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