The Property Unleashed Podcast The Essential Guide to Due Diligence in Serviced Accommodation
Due diligence makes or breaks your serviced accommodation business. Without proper analysis, you're simply gambling with your investment capital and hoping for the best.
Successful SA operators treat each property as its own business entity, requiring thorough market research and financial analysis. This means systematically tracking competitor properties and local hotels through detailed spreadsheets, monitoring price fluctuations month-by-month to understand seasonal variations and demand patterns. Unlike traditional rentals, serviced accommodation relies on dynamic pricing – rates that fluctuate dramatically based on local events, seasons, and demand cycles. A Premier Inn near Wembley Stadium might charge £100 per night normally but command £900-1000 during major events!
Understanding your cost structure is equally crucial. Fixed costs (mortgage/rent, insurance, utilities, maintenance fund) must be paid regardless of occupancy. Variable costs (cleaning, linen, sundries) fluctuate with guest turnover, while cost of sales (OTA commissions, booking systems) directly relate to securing bookings. The smartest operators establish a monthly maintenance pot (£100/property) that accumulates over time, creating a financial buffer against unexpected repairs.
The golden rule? Your break-even point should be 50% occupancy or less. Many novices accept break-even points of 65% or higher, severely limiting profit potential. For optimal performance, target 70-75% occupancy – consistently higher rates often indicate underpricing, while lower occupancy suggests overpricing or market issues.
Ready to build a six-figure SA business? Visit thepropertyunleashed.com for free resources including training masterclasses and deal analyzing spreadsheets. For personalized guidance, check out our Clarity Day workshops where we'll help you craft a bespoke property investment roadmap tailored to your goals and circumstances. Stop guessing and start investing with confidence – your profitable SA business awaits!
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- Visit www.thepropertyunleashed.com to explore are free Property Ebooks and guides in Rent-to-Rent, Serviced Accommodation, Deal Sourcing and and also our FREE training masterclasses to help you generating a sustainable income through property.
- https://www.facebook.com/groups/816926952556608 to meet like-minded property investors and be a part of the community.
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