Property investing is one of the most solid and successful investments that people have historically made. With the market and economy constantly evolving and also fluctuating, people have become more creative in the ways they generate cash flow from their property investments. Thousands of investors, as well as everyday people, have found amazing success operating serviced accommodation properties taking on guests who are booking through travel sites, as well as showcasing their short-stay properties on their websites, whether it’s in London, the midlands countryside or anywhere in between.
Investing in serviced accommodation is a great alternative to your standard buy-to-let property. It is important to first do your research as to whether serviced accommodation is the right strategy for you and then take actionable steps to make sure your serviced accommodation business will be successful from the ground up.
If there is still any confusion surrounding what serviced accommodation is, it is essentially a property that is let out on short-term stays, typically less than 90 days, and charged to guests on a nightly basis. Guests tend to opt for serviced accommodation properties over hotels for the extra amenities that are possible in serviced accommodation properties.
For example that will typically be fully fitted with a kitchen, different rooms in the home, and other extras that hotels wouldn’t typically provide. Serviced accommodation properties can be let out to guests of all genres. Whether it is holiday seekers looking to explore the local areas, or even business professionals who need to travel to new areas for long periods and would prefer to have some homely features where they stay that a hotel can’t provide, serviced accommodations are perfect for all scenarios
There are many benefits of investing in and operating your own serviced accommodation business. Here are just a few of the most prominent benefits:
As much as the benefits may have persuaded you to dive into your journey, you should also understand the downsides and risks involved with managing a serviced accommodation property. Here a some of the downsides:
If the benefits of running serviced accommodation properties outweigh the downsides involved, you should start by creating a business plan for getting started. Consider the following steps:
First of all, if you have already acquired a property with a mortgage or you are looking to change your buy-to-lets into a serviced accommodation, you need to make sure that you have the correct mortgage. A buy-to-let mortgage will not permit you to use the property for serviced accommodation. Review your existing mortgage and speak with your lenders as to which avenue is ideal for serviced accommodation.
If you are yet to buy a home fit for serviced accommodation, you should first find out the demand for the area. The demand for serviced accommodation can be found in several different ways. First of all, you might consider checking out your competitors who are operating on booking sites such as Airbnb, and see how booked up they are for the next few months. Make sure the property is in a similar area to yours and offers the same amenities as you intend.
Also, you might consider ringing the hotels local to the area of your choosing to ask how booked up they are. If they are busy it would suggest that people are making frequent short stays in the area. There are also applications you can buy which tell you the exact demand and occupancy rate for specific areas and even lets you see the seasonal differences.
If you want guests to choose your property over others, you need to make sure that it looks inviting. One way to do that is to make the design of the property high-standard, including items such as luxury cushion covers and also unique furniture. Small design features can elevate your property and make it seem much more attractive, even if the decor is affordable.
Whilst amenities such as a fully functioning kitchen is a key part of successfully serviced accommodations, there are also small additions that should also be considered. For example, the kitchen should be fully equipped with utensils to cook with, and perhaps you might consider adding a fully equipped coffee station for guests. Also, it would be valuable to offer incentives such as balloons and bottles of bubbly for guests staying for birthdays.
Overall, investing your money into creating serviced accommodation properties is a valuable investment that will give you great profitable rewards. Make sure that you do integrate research into the area you are operating in for your serviced accommodation property, as well as nail down the right steps to take before listing your property online for stays.