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We LOVE Serviced Accommodation. Here’s why!

So a little while ago, we gave you our top tips on how to make your serviced accommodation (SA) strategy a success. If you missed it, you can catch up here.

Today, we’re going to run through why it’s one of the best high cash flowing strategies in property investing.

When talking about, or hearing the term “Serviced Accommodation” most people think of a quaint cottage in the rolling countryside for a week away on holiday, or an apartment in a bustling city centre for a weekend break. In reality, the term encompasses so much more than that! It can be so wide ranging, that it’s actually more of a business strategy than a property strategy.

Pre pandemic, the trend of people choosing SA over other types of accommodation such as hotels, had begun on an upward curve. The pandemic then magnified the need for self contained accommodation where people could set up their home from home.

What is Serviced Accommodation?

‘Serviced Accommodation’, ‘Serviced Apartments’ or ‘Managed Apartments’ are types of accommodation that refer to properties useful for people to rent on a short-term or long-term.

This might sound like the normal type of accommodation that is also rented by people on a short-term or long-term basis, but there is a major difference between the two. Serviced accommodation comes with pre-equipped amenities and utilities. This means that it is ideal for anyone looking for the best type of accommodation possible, and requiring access to all the features that they usually get within a house of their own. Most guests will expect a fully equipped kitchen, TV, WiFi, a desk space and frequent housekeeping for longer term guests.

Who Will Use It?

Again, your mind might be immediately drawn to “someone going on holiday”, but in reality, the types of people using SA reach way beyond that.

SA is used by professionals who are working in a role away from where they live but would prefer their own space, cooking facilities and a place to call “home” away from home, which is simply unachievable in a hotel. Trades who are working away from home for months at a time are another hot favourite.

Even larger groups and families going on holiday also favour SA, as it means everyone can have their own space and come and go as they please. Young children might need naps or meals prepared outside of meal times, older children can have their own bedroom as they would do at home, but there is still a private communal space within your party to socialise, cook and enjoy the company.

It’s great for healthcare professionals who are often on short term placements and work unsociable hours. It gives them the advantage of working to their own schedules, making meals when it suits them rather than 24 hour room service or a vending machine diet. There are washing facilities that they can use at their leisure and don’t have to pay extra for.

In simple terms, if you get your offering right (see our top tips here), it can appeal to just about everyone and anyone.

Why SA?

For guests, SA prices tend to be around 20% less than that of an equivalent hotel stay but, on average, provide around 30% more space. In addition to this, for longer stays, VAT reduces to just 4% after 28 nights so those staying for an extended period can really make the most of these savings.

As a SA operator, the ROI is much higher than a conventional BTL. For example, you could be charging £150 per night for a two bedroom house as serviced accommodation, but the same property would rent for £700 a month as a standard BTL. Before costs, taxes and voids, on average that’s an increase of £3,800 per month! Your voids do sit a little higher with SA and it’s sensible to work on a 65-75% occupancy rate depending on the area and other variables. In comparison, for a standard BTL, you’d work on around 93-95% occupancy.

We LOVE SA!

At Brentor, we are HUGE fans of SA and we are perfectly located for it. We have accommodation suitable for tourists, seasonal workers, hospitality workers, universities, the maritime industry and just about everything else!

If want to learn more about serviced accommodation or hands free investment, book a call or online chat with us today and find out how we can get you great return on your hassle free investment!


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