Serviced accommodation is the fastest growing area in UK hospitality.
It offers a lot of advantages over other forms of rental properties. It has the potential to mean higher rent in the right areas and strategies are accessible that increase the average length of a stay.
Where are the best areas to invest in serviced accommodation and how can you go about it?
This blog post explains.
What is serviced accommodation?
Serviced accommodation can be any type of residential property that is let out with additional services provided. This type of accommodation can be used for anything from short, one-night stays to rents for several months.
Pitched between a traditional holiday-let and a hotel, serviced accommodation is becoming increasingly popular among demographics including tourists, business travellers and those looking for longer stays.
In a nutshell, it means that a landlord provides services to guests staying in the accommodation from simple housekeeping to more comprehensive amenities.
Serviced accommodation can also exist as serviced apartments. These serviced apartment blocks can include in-house gyms, restaurants, shops and other 24-hour services.
What are the benefits to landlords of serviced accommodation?
Property owners are looking increasingly to serviced accommodation to maximise yield on their rental properties.
With a traditional buy-to-let property, landlords secure tenants on a short-term tenancy agreement, receiving monthly or weekly rental payments.
Though this secures income for at least six months, serviced accommodation offers greater flexibility – meaning that the property can be made available for shorter periods as well as longer lets.
This gives the potential to greatly increase your rental income – as the payment received from guests on multiple short-term lets will usually add up to more than the monthly income received from buy-to-let tenants.
Where can I find the right location for serviced accommodation investments?
One of the major factors in keeping a property occupied is the right location.
Tourist destinations are an obvious choice, however landlords in city centres can also be extremely successful, by providing accommodation to business professionals.
Factors to consider when choosing a serviced accommodation location include:
Tourist attractions mean that visitors can find something fun to do during their stay and explore things they may be curious about in the local area.
Museums, historical buildings, amusement parks, nature preserves, famous landmarks, outdoor adventures, day spas, farm tours, and even shopping malls represent locations that guests may want to explore.
These attractions don’t have to be within walking distance, though it is encouraged. It is essential that these are within travelling distance, through driving or public transport.
If business travellers are part of your target audience, it is encouraged that you look for areas where company headquarters are based or conference centres are nearby.
Airports are good for demand all-year round. These service accommodations are most likely to attract people staying for one night before or after a flight.
Sports venues will also be used by musicians and other performers as regular event venues that attract a large crowd. Many sporting venues also have conference centres that attract people from out of town too.
Groups of golfers are likely to book accommodation for a week when on a golfing trip or break. If it is a championship course, serious money can be earned from spectators and delegates.
In situations where people are in hospitals for long periods, they often have a relative or family members who will want to be nearby to make visiting more convenient. It is also important to consider people working in the hospital.
What are recommended cities for serviced accommodation?
You can make serviced accommodation work anywhere as long as knowledge is obtained and due diligence is carried out.
Here are five recommended cities for investing in:
1. ) London: This is the capital of business and tourism in the UK and has a massive demand for serviced accommodation. It features a large number of tourism hotspots, business hotspots and conference venues.
2.) Manchester: This city has a large number of property developments ongoing with hundreds of new build projects completed in the last few years. The city has many vacant plots ready to use.
3.) Newcastle: This North East city is a major business for technology, engineering and digital industry and has a rapidly growing economy. It has comparatively low prices compared to some other cities.
4.) Liverpool: This city is experiencing an economic boom with numerous regeneration projects ongoing. Liverpool receives 54 million tourists each year and the majority of serviced accommodation properties in Liverpool are achieving more than 10% rental yield.
5.) Birmingham: England’s second city rivals London as a centre for business and a commuter destination. Serviced accommodation focused towards professionals is in high demand.
How should you consider competitors when deciding on serviced accommodation?
In most serviced accommodation hotspots demand outstrips supply, but it still pays to make sure there is no oversupply.
You will be able to use search tools to find out how much-serviced accommodation is already there and whether you can compete with what is available.
By visiting serviced accommodation properties, it will give you an idea of what is expected from serviced accommodation in the area. You can gauge how successful the property is by talking to the owners or managers.
What are my next steps?
The Serviced Accommodation Blueprint course is designed to teach you how to take advantage of the UK’s fastest-growing property strategies, how to accelerate the process of obtaining deals and how to safeguard the longevity of a serviced accommodation business. It will teach you how to maximise profits using proven, simple strategies.
Alternatively, Wealth Through Property is the UK’s leading 2-day property investment course. It is designed to provide you with specialist knowledge of proven investor strategies. Learn how to get started and build your property portfolio and gain real-world advice.
To find out more information about Wealth Through Property and the other courses we offer call us on 01302 897131 or email firstname.lastname@example.org.