Interview with our Serviced Accommodation Experts, Chris and Maria Harvey
We are so excited to have had a truly ‘magical’ interview with our team members and trainers Chris and Maria.
They have a whole host of experience running serviced accommodation projects and most famously, have a couple of themed serviced accommodation units which they run on a ‘rent to serviced accommodation’ basis. These are designed to target Harry Potter fans who are visiting the Warner Brothers Studio Tour, the making of Harry Potter.
In today’s blog post they reveal their secrets and top tips for running a successful Airbnb unit or serviced accommodation business.
Why did you decide to get started in property?
Like many who venture into the world of property investing, we wanted to create income that was somewhat passive. The only evidence that we had at the time was Maria’s Father, who owned and managed two HMO’s that effectively allowed him to retire early. It was this that led us to believe that property was a way we could achieve this.
Tell us how you got started in property…
Initially, we were accidental landlords, way back in the 1980’s. We really didn’t know what we were doing at that time. We were going to move to Banbury in Oxfordshire, but the sale of our house in London fell through. Somehow, we still completed on the house we were buying in Banbury and we decided to rent it out as a 5 bed HMO.
As I said, we really didn’t know what we were doing and we sold it a few years later.
Fast forward to the noughties, and we had a disastrous foray into new builds, something we would steer well clear of now. The company we bought them through, now long since gone, told us they had negotiated volume discount on a large number of apartments and they claimed to be passing those savings on to investors.
You know what they say about ‘if it looks too good to be true!!’ well looking back, they weren’t discounted at all, the rent they achieved was far lower than we were advised and we ended up with two crippling liabilities. A harsh and very expensive lesson.
Luckily, in 2012 we found Fielding Financial. It was a no brainer to get professional and accredited education. At last, we had knowledge, which was great, but we also had amazing support, which is so important.
We have since built a portfolio of buy to lets, we have also invested in student and semi professional HMO’s and now of course, serviced accommodation as well.
– Photo credit – Chris & Maria Harvey
Why did you decide to choose serviced accommodation as an investment strategy?
We started our furnished holiday let business because of the cashflow it can generate. We are looking at HMO level income from buy to let type properties. Another huge incentive for us was the fact that this business isn’t affected by clause 24, so we can offset the mortgage interest against our income.
The other thing of course, is that when you get a great review or a guest messages to say they had a great time and they loved your place, it really does warm the cockles of your heart.
What is your favourite thing about serviced accommodation as an investment strategy?
The cashflow first and foremost, but setting it all up, buying all of the accessories to make the place lovely is great fun too. When you get lovely messages or great reviews it is really gratifying.
Tell us about your serviced accommodation units…
We have a number of houses and a flat that we own, which are used as furnished holiday lets by a wide variety of guests. We set them up to be comfortable, pleasant places to stay, that will appeal to most people.
We have had families stay, we also have contractors, people on City breaks, people who have emigrated and are coming back to visit their family, people coming to the theatre, festivals, concerts and sporting events, people visiting to check out the local universities or coming back for graduation celebrations. Quite a mixed bag of guest profiles, which is great.
We also have a couple of themed serviced accommodation units which we run on a rent to SA basis. These are designed to target Harry Potter fans who are visiting the Warner Brothers Studio Tour, the making of Harry Potter.
These are very well received, enhancing the experience for those lucky enough to be visiting the studio. We get a lot of Birthday celebrations in these and we like to decorate the place for guests and leave them a celebration cake, which they really love.
– Photo credit – Chris & Maria Harvey
How has COVID-19 affected your serviced accommodation investments?
Initially, the phone didn’t stop bleeping, with notifications of cancellations, which was very disconcerting. The first four to six weeks of the pandemic was really quiet. We did reach out to the local council and NHS trust to see if we could rent out to key workers.
After about six weeks, we did start to see a bit of a bounce back from contractors and key workers, who were still able to operate.
There was a bigger bounce back around August, certainly in the themed units, when the first lockdown was eased. The next lockdown of course, resulted in more cancellations, but we still had key workers staying with us.
The buy to lets still worked as they always had done, so that was a blessing.
Since the roadmap to returning to ‘normal’ has been laid out, the advanced bookings look very strong, particularly for the Harry Potter units, but also for the standard SA units too, so we are really excited about the coming months ahead.
What are your top tips for someone wanting to start investing in serviced accommodation?
Understand first of all, that this isn’t traditional property investing, you are entering into the world of hospitality business.
You won’t have tenants, you will have guests. These guests will have the same demands that you would have when you go and stay in a hotel so you need to be able to respond quickly to their needs.
With that in mind, you must have robust support, so first and foremost, a great cleaning company. And don’t forget, you could require a clean on a Sunday or a Bank Holiday Monday, so it really does need to be robust support. You need a linen/laundry provider, a gardener, and a handyman for when things don’t go according to plan. You will also need processes to deal with guest communications, how do the guests get access to the property etc.
And of course, you need the right lending, insurance etc to be able to operate.
Run the numbers. What can you expect on a nightly rate and my rule of thumb would be to ensure that the deal stacks up at 50% occupancy with all the cleaning and laundry costs that entails.
Finally, if you intend to scale up in any way, both in terms of the number of properties and in the number of channels you advertise on, I would suggest using a channel manager to ensure you don’t get double bookings and to handle all of the guest communications.
Do you want to learn more about investing in serviced accommodation?
See our Serviced Accommodation Online Course here.