The Progressive Property Podcast Serviced Accommodation, The Pros & Cons For Investors
Welcome back to The Progressive Property Podcast. Peter returns to discuss the property strategies you can use to begin your own journey in property investment. Today Peter focuses on Serviced Accommodation and brings you both the pros and cons of this new innovative property cashflow strategy.
KEY TAKEAWAYS
- With Serviced Accommodation, you essential let out your property on a short-term basis. The difference is with a buy-to-let, you will have a 6-month or longer tenancy, however, with Serviced Accommodation you are letting out your property for a shorter period of time.
- It's very flexible and not as rigid as a buy-to-let where you will need to have an AST (Assured Shorthold Tenancy) and often the type of properties that are being used as buy-to-lets can also be used as Serviced Accommodations and the best bit, you will typically achieve a much higher rent.
- Rental fees that you can charge for a shorter-term let will be substantially higher if you're using your property as a serviced accommodation unit. However, you might not have it filled every night. Therefore you will need to work out your occupancy level and how many nights you will need it to be filled to make a profit.
- In many ways, serviced accommodation is more of a business strategy than a property strategy. It's much like a B&B, an alternative name would be holiday lets as they are very similar. You will need to set up your unit a bit like a hotel and furnish it and keep it clean etc. There's a lot more work that you need to put into it to get it up and running.
- 95% of the time you will need planning for your serviced accommodation. It’s not considered as residential property, its more of a holiday let. As you need planning this will affect how you finance the property, this is different to a buy-to-let and you will need commercial lending.
- With Serviced Accommodation, you need to ensure you have the right insurance and policies in place.
BEST MOMENTS
- With all the things you need to do to maintain your serviced accommodation, you will need to have a team behind you.
- With Serviced Accommodation, you are really creating yourself another job, rather than freedom. However, the returns are so good it's worth it.
- If you get contractors as tenants they may stay a lot longer at your serviced accommodation.
- Do not use your buy-to-let mortgage to purchase a property to then use it as a serviced accommodation.
VALUABLE RESOURCES
If you’re interested in finding out more about the right mortgage product to finance your serviced accommodation, please email ThePropertyTeacher@gmail.com and Peter will put you in touch with his mortgage broker.
Join the Progressive Property Community here:
http://www.thepropertyteacher.co.uk/
ABOUT THE HOST
Peter Jones is a Chartered Surveyor, an author and a serial buy-to-let property investor. He has been involved in property for over 35 years and now owns 78 letting units. He is still actively involved in buying and renovating property, and regularly flips properties for profit. Peter has written a number of successful property books. The first, An Insider’s Guide to Successful Property Investing, was first published in 2000 and was
one, if not the very first, book of its kind which was written for what we’d now call buy-to-let investors. On the back of its success, he was invited to be a guest writer for Property Secrets and wrote Spanish Property Secrets, French Property Secrets, and Portugal Property Secrets. He has since written a number of other successful titles dealing with UK investing including 63 Common Defects in Investment Property and How to Spot Them, the highly acclaimed The Successful Property Investors Strategy Workshop and The Property Renovator’s Workshop ,in which Peter describes step-by-step how he built his own property portfolio, starting with virtually none of his own money.
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