Benefits of Serviced Accommodation for Landlords
Serviced accommodation (SA) presents a compelling real estate investment option characterized by fully furnished properties available for short and long-term lettings, predominantly short-term. While some landlords may be hesitant to explore SA due to prevailing myths and objections, we firmly believe that it offers considerable benefits as an investment opportunity. Allow us to shed light on the advantages of serviced accommodation:
1.Increased Rental Income:
SA proves to be a profitable investment due to its flexible pricing structure. Unlike other property types, serviced apartments can be rented on a per-night basis, allowing landlords to generate higher rental income. For instance, a typical Manchester-based apartment that would fetch £1,000 per month in a traditional rental scenario could potentially command around £140 per night, depending on the region.
Additionally, SA units offer greater tax efficiency compared to single let properties. Profits derived from furnished holiday lettings, for example, are included within relevant earnings for pension purposes. Moreover, landlords can claim capital allowances on furniture and other items purchased for the SA unit, providing tax relief that can potentially save thousands of pounds over time.
2. Lower Start-Up Costs and Less Competition:
SA presents an advantageous investment option for those starting out in the property business. Compared to Houses in Multiple Occupation (HMO), serviced apartments have lower start-up costs and face less competition.
The SA market is still relatively nascent, offering landlords an opportunity to capitalize on a less saturated market. Additionally, serviced apartments are typically smaller in size and can be furnished with a minimal upfront investment. While establishing an HMO business requires compliance with licensing and regulatory requirements, SA operates with fewer rules and legislation. While some may perceive this as a lack of legal protection, it is a misconception. Landlords can create robust SA contracts that outline terms and conditions, ensuring appropriate safeguards for their property.
3. Minimized Void Periods and Tenant Rent Arrears:
One of the significant advantages of SA is the elimination of concerns related to late rent payments or tenant rent arrears. Unlike long-term rentals, SA guests are required to pay in advance, ensuring a steady stream of income. So we can guarentee your rent requirements month on month.
4. Versatile Location Suitability:
Serviced apartments are not limited to holiday tourist destinations. In fact, they are widely sought after in various locations, including those frequented by corporate travelers. SA, also known as self-catering accommodation, appeals to both leisure and business guests, providing an opportunity to cater to a broader market. So, if you have concerns about your SA's viability in non-tourist locations, rest assured that this type of accommodation is in demand across diverse areas.
Benefits of Partnering with us as a serviced accomodation provider: Managing serviced accommodation properties can be demanding, but partnering with an experienced SA company like ours can alleviate the workload and enhance returns. We possess years of expertise in the industry, ensuring efficient management and maximizing profitability. If you are interested in exploring further, we invite you to contact us for a discussion to address your specific needs and concerns.
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