What is Serviced Accommodation

In this blog post we will go through what Serviced Accommodation is , benefits , understanding the market , how to get started so lets dive in .

Serviced accommodation has become increasingly popular in recent years, offering a flexible and lucrative option for property investors and hospitality entrepreneurs alike. In this comprehensive guide, we'll explore what serviced accommodation is, its benefits, how to get started, key considerations, and tips for success in this exciting sector of the hospitality industry.

1)What is Serviced Accommodation? 

Serviced accommodation, also known as short-term rentals, refers to fully furnished properties available for short-term stays. Unlike traditional hotels, serviced accommodation properties provide guests with the home away of home feeling. The properties will be including kitchen facilities, living areas and services such as cleaning and concierge.

2) The Benefits of Serviced Accommodation

- Higher profit margins compared to traditional rentals

- Flexibility for guests, especially business travelers and families

- Potential for passive income if set up correctly and diversification of investment portfolio

3) Understanding the Serviced Accommodation Market

Demand for serviced accommodation is driven by various factors, including business travel, tourism, and relocation. Understanding your target audience and the seasonality of the market will help you maximize occupancy and rental income. 

Most of the demand will be in the city centres and in the proximity of : hospitals , stadiums , warehouses , industrial estates and factories , Universities , transport links etc.

4) How to Get Started in Serviced Accommodation

- Finding the right property: Look for properties in high-demand areas with good transport links and amenities.

- Setting up your property: Furnish and equip your property to a high standard, ensuring it meets the expectations of guests.

- Listing platforms: Utilize online platforms such as Airbnb, Booking.com, and others to market your property and attract guests.

5) Key Considerations for Serviced Accommodation Investors

- Location selection: If you're looking to buy a property to use as an SA choose locations within up to 4 hours drive from you with high rental demand and potential for growth. The distance wouldn't really matter as you wouldn't be managing it yourself you should get a SA management company to do the hard work for you giving you a completely passive income.

If your looking to rent a property this should be 1 - 1.5 hours from you this would be sufficient so if anything small arises in the property you wouldn't get involved but if something important arose you can quickly drive there.

- How to calculate your profit. For this you will need to find out the average nightly rate for your property, lets say this time is £100 per night. Rent or Mortage will be £1000 pcm and bill will be 200£ pcm.

On average SA units have an occupancy rate of 70%(21 nights occupied) in the UK.

You will have to break even at 50%(15 nights occupied) and anything above that will be your profit

1. 30 (days per month on average in the year) x Average Nightly Rate x 0.85 ( this will take out your OTA* fees) x 0.50 ( 50% occupancy ) - Expenses ( Rent/Mortgage + Bills ) 

30 x 100 x 0.85 x 0.50 - 1200 = 75£ profit after expenses at 50% Occupancy . This is a bonus as we have to break even at 50%.

Please leave a comment with the profit that this property will bring at 70% and 100% occupancy rate !

- Property management options: Decide whether to manage your property yourself or hire a professional management company. Managing yourself will be quite time consuming but it will bring you more money in your pocket while hiring a SA management company will costs you a bit more but it will take the property off your hands.

6) Managing and Marketing Your Serviced 

Accommodation Property

- Guest communication and customer service: Provide excellent customer service to ensure a positive guest experience. Ask for reviews after they've checked out. 

- Cleaning and maintenance: Maintain your property to a high standard to attract positive reviews and repeat bookings.

- Marketing strategies: Use a combination of online marketing, social media, and word-of-mouth to attract guests and maximize occupancy. Another good way to find people to stay in your property is by reaching out to companies that are in the area only during the week ( Monday to Friday) and offer the great deal to accommodate their staff. You can find them parked in the evening in hotel parking lots. Take down numbers from vans/cars , call them and tell them what you offer. Great way to have long term bookings.

7) Legal and Regulatory Considerations 

- Planning permission and regulations: Ensure your property complies with local planning and regulatory requirements for short-term rentals.

- Health and safety: Implement appropriate health and safety measures to protect guests and comply with legal obligations.

- Tax implications: Understand the tax implications of operating a serviced accommodation business, including income tax, VAT, and business rates.

8) Tips for Success in Serviced Accommodation

- Focus on guest experience: Prioritize guest satisfaction to generate positive reviews and repeat bookings.This should be your main focus especially in the beginning when you try to grow your listing to get to the top of properties that appear on the 1st page.

- Continuous improvement: Regularly assess and update your property and services to meet the changing needs of guests. If you're not getting any bookings check your competitors price , you may need to lower your nightly rate.

- Network building: Build relationships with suppliers, service providers, and other industry professionals to support your business growth. Reach out to people in groups as sometimes you will have a surplus of guests that you won't be able to accommodate and you can point them to someone else. Call it a favour or you may get a small incentive.

In the end I will finish by saying that serviced accommodation offers a unique opportunity for property investors to generate high returns and create passive income streams. By understanding the market, mastering key considerations, and implementing effective strategies, you can build a successful serviced accommodation business that provides value to guests and delivers financial rewards for years to come. So, are you ready to embark on your serviced accommodation journey? If so please Subscribe and get your free gift today !