Are serviced apartments a good investment?
Serviced apartments have rapidly grown in popularity in recent years, but does that mean you can make money from serviced apartments?
The short answer is ‘yes, absolutely’. Traditional rental properties generally offer gross yield of cirta 6-8%, with exception of London & South East being much lower. Serviced apartments as an investment strategy is like a hybrid of traditional buy to let and a business.
The cost of running it is higher, due to frequent cleaning, changeover, guest communication. After taking into consideration of all the additional costs, Serviced Apartments do offer significantly higher returns in comparison.
This blog will cover what serviced apartments are and how you can profit from them.
What are serviced apartments?
Put simply, a serviced apartment is a fully furnished apartment or house available for short or medium-term stays. They’re ideal for both business and leisure travellers who want the luxury of a hotel with added space and privacy. A serviced apartment is a home away from home while you’re on holiday or travelling for work.
Serviced apartments offer various amenities and weekly cleaning services to keep all the conveniences of staying in a quality hotel. Many offer added benefits like superfast broadband and complimentary Netflix!
Although they’re called serviced apartments, the size of properties can range from one-bedroomed apartments in a highly central location, to larger three or four-bedroomed houses on the edge of the city. So, serviced apartments can attract sole business travellers, couples on holiday, and large groups.
How to profit from serviced apartments
To successfully make money from serviced apartments, you will need to run it as a business. Everything you do should be about adding value for your guests’ experiences. From speedy replies to guests’ requests, to arranging something specific.
Our top tips on running a successful short-term rental business:
Offer services that add value for guests
Serviced apartments have become so popular because they offer home comforts away from home. Ensure the property is fitted with with everything you need at home. Things like high speed internet and a kitchen with full utensils, these all add towards the homely touches a serviced apartment can have.
24 hour check-in
Another essential element of a quality serviced apartment is a 24/7 check-in with clear instructions. Guests’ experience is key to succeed in this business. Here at Snug House we offer a self check-in facility on all of our properties. There is also someone on hand to meet if required, to make your check-in as smooth as possible.
Serviced apartment guests have come to expect frequent cleaning or housekeeping services for longer-term stays. Including weekly cleaning for longer stays is a must to help your property compete with nearby hotels. Whether guests are travelling for business or leisure, the last thing they want to do is spend their time cleaning while they’re away.
Monitor guests’ reviews and respond to feedback
Previous guests’ reviews can be the deciding factor that makes potential guests book your accommodation. Showcasing glowing reviews can be a great way to attract new guests and ensure your serviced apartment has a high occupancy rate. It’s even more important to take on board of negative review to make necessary improvements and to ensure better experience for the next guests.
Choose the right location
If you’re investing in a serviced apartment, ensure you do your research first. Check if there are tourist attractions nearby as well as bars, restaurants, and cafes. Have a look at what they are like in the local area and how easy the property is to get to via public transport.
Make sure the location of your serviced apartment has plenty to offer for both business and leisure travellers.
How can Snug House help
Learning how to start a short-term rental business yourself can be challenging and time-consuming. Especially, it can be daunting to have to deal with all of the above. The good news is that’s not the only option. That’s where we come in, to do the heavy lifting for you.
Snug House is an established company that provides high-quality, homely apartments for short to medium-term stays. We primarily have properties in Sheffield, where we’re based, but we’re also interested in working with property owners in cities across the UK. If you’re looking for a higher return on investment than traditional rental agreements, we can help!
What we offer
With Snug House, you have the option of a flexible commission arrangement or a fixed income arrangement. Both options have many benefits, and our team will be happy to discuss these with you in more detail.
Both these options come with full property management and housekeeping services. You don’t need to worry about marketing your property or providing added extras – we’ll handle all that on your behalf. We take all the stress out of letting a serviced apartment and let you relax while benefiting from higher-than-average rental yields!
The demand for serviced apartments is still growing. Serviced accommodation is rapidly becoming the preferred alternative to hotels for both working professionals and travellers.
Call us today, and we’ll be happy to discuss your property’s potential to become a Snug House serviced apartment.