An Introduction to Serviced Accommodation
To celebrate #EnglishTourismWeek2021, our team of property experts have prepared a series of blog posts all about serviced accommodation as a property investment strategy, to enable you to generate a profit by becoming a successful AirBnB host.
To kick-start the week, our team have prepared a helpful guide to explain what serviced accommodation is and how you too, can generate an additional income through this popular investment strategy.
What is serviced accommodation?
Serviced accommodation is similar to buy-to-let in the sense that you own a property that other people will pay to stay in, but it is different in the fact that it is usually let out on a short-term basis. Where you can expect people to stay in a buy-to-let for 6-months or a year, people will usually stay in serviced accommodation for a weekend or a few days.
The people that stay in serviced accommodation are also referred to as guests – rather than tenants like you would call those staying in a buy-to-let property. You should also note that as an investor you will need to fully furnish your serviced accommodation and provide any required amenities too, which isn’t always required with buy-to-let property investments.
Serviced accommodation can be any of the following:
- Short term lets with additional services
- Short term furnished holiday lets
- Hospitality business
- Something you own (purchase or convert)
- Something you rent (Rent to Serviced Accommodation)
- Something you manage (you’re the management agent)
- Part of your own home
Why is serviced accommodation a good investment strategy?
Serviced accommodation as a property investment strategy is hugely popular due to its high cashflow and relatively low capital requirement. There are also many tax advantages, including section 24, capital allowances and small business rates relief.
Your guests pay upfront before their stay and the best thing is it can all be largely automated, so you can be as hands-on or hands-off as you like.
Where should I invest in serviced accommodation?
The secret to a profitable serviced accommodation or AirBnB unit is demand. It is important to invest in a place that people want to holiday or stay away overnight.
This could include places like city centres, coastal and countryside areas, popular tourist attractions, areas of natural beauty and near activities.
To find out more about where you should invest in serviced accommodation click here.
The 30 Most Popular Tourist Attractions in the UK
How do I get started?
First you need to find a property that is suitable for serviced accommodation. You could either purchase a new asset, convert an existing asset or look into a rent to serviced accommodation model.
Then, review how your house, room or facilities compare to others. Take a look at AirBnB to see if there is a market and identify if your property has a unique selling proposition or appeal.
Investing in property to let it out via AirBnB or other online travel agents can be challenging, but also very rewarding when you know how to manage correctly.
To help you manage your AirBnB, it is important to have a good power team which can include a cleaner, handyman, plumber, gardener, accountant, mortgage broker, insurance broker and many more!
Before you let our your serviced accommodation unit, it is essential to:
- Get insurance adapted and understand exclusions
- Decide pricing (competitor driven unless unique)
- Create house rules and instructions
- Get pictures of your house and rooms dressed
- Would you feel better with locks on doors and other security measures?
- Arrange for spare keys to be cut
To launch your AirBnB:
- Open an AirBnB account, click on ‘host and listings’ and simply follow the instructions.
- The help desk is reactive and very good at responding to emails
- Select pre-approval to remain in control (validate verifications/fits your schedule).
Do you want to learn more about generating an income through serviced accommodation?
See our Serviced Accommodation Online Course here.