Serviced accommodation is a way of renting out property and is something that has completely revolutionized most landlords and investors finances.
Instead of renting out something like a studio flat that will fetch you around four hundred pounds a month, you rent it out per night for the same amount of money just like hotels do and tend to have even smaller rooms than the studio apartment. It makes no sense renting out your apartment to someone who will be paying you a monthly fixed fee when you could rent it out on a short term basis.
More people are now investing in serviced accommodation including some of my students that have now become financially free with minimal portfolio in property management. If you’ve never heard or you’ve heard about serviced accommodation but still don’t understand it properly, then this platform is the right place for you to gain such knowledge.
Here are things to look out for before engaging in serviced accommodation:
1.Demand
If you own property, it’s important to understand that demand for accommodation in your area can be speculated by observing things like hotels, shops, and nature of the people around. If the hotels in that area are doing well business-wise, then making people know that you offer accommodation services might be the right thing to do.
I’ve seen situations whereby next door to a hotel, there’s a room being rented out for a fraction of the price the hotel is renting out for.
The availability of hotels and shops in your area should dictate your pricing considering that you even have a much bigger space than they have to offer.
- Marketing
Marketing your services is a crucial step as it lets potential customers know that you offer serviced accommodation.
The reason as to why businesses such as hotels are able to fill up and make a fortune in accommodation is because everyone knows of their existence. A simple google search for hotels in your area will provide you with a ton of options and websites such as booking.com that spend millions of pounds in advertising this said businesses. You can list your property for rent on a short term basis at booking.com or Airbnb and won’t have to pay big investments in terms of advertising.
3.Legalities
Before getting started with service accommodation, it’s important to confirm whether your need licenses and if the property is on a mortgage, it’s important to engage your lender on whether renting out your property on short term basis is allowed or prohibited to avoid breaching of contract.
There are some areas such as greater London where you can’t rent out your property on serviced accommodation for more than 90 days a year and therefore you do need to check that out with relevant authorities because there are some areas that do permit such businesses but generally speaking across the UK, you do not need any kind of license or permit and so anyone can do this.
If you do need a license or happen to be in Greater London, you are going to need planning permission, you are going to need to change the use of the property and then you’re going to need to work out whether it’s worth doing that or not.
4.Planning
You need to get a channel manager that will list your services to different websites such as booking.com and have a calendar system for booking in order to avoid situations like double-booked rooms.
You are going to as well get cleaners that will be making sure the rooms are sparkling clean after someone has used them. On average, you may have to pay for cleaners let’s say 12 pounds an hour and provide a key safe outside the property so that the guests can let themselves in and out.
- Furnishing
If you’re doing serviced accommodation, it’s really important that you furnish the property and make it look good for your guests. It doesn’t have to cost thousands of pounds as it can just cost you hundreds to furnish a really bad property.
One of the reasons as to why hotels justify their high pricing on accommodation compared to you is because they furnish and make the guest feel satisfied with the option while picking a place to stay for the night. The returns you invested in preparing the property for the guest will indeed double or even triple as serviced accommodation is a very lucrative type of business investment.
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