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8 Key Steps to Choose the Best Location for Investing in Serviced Accommodation Property

Posted by Jehan Anis on July 19, 2023

Choosing the best location for investing in a rent-to-serviced accommodation property is a crucial step that can significantly impact the success of your investment. The location plays a vital role in attracting guests, maximizing occupancy rates, and generating consistent rental income. Factors such as market demand, proximity to tourist attractions or business hubs, accessibility, and local regulations all come into play when selecting the ideal location. In this guide, we will explore key considerations and provide valuable insights to help you make an informed decision. By understanding the dynamics of different locations, assessing the target market, and evaluating the potential for growth, you can identify the best location that aligns with your investment goals and positions your rent-to-serviced accommodation property for long-term profitability. In this comprehensive guide, we will walk you through the essential considerations to help you select the best location for investing in a rent to serviced accommodation property.

What Is A Rent To Serviced Accommodation Investment And Is It Smart To Invest In It?

What Is A Rent To Serviced Accommodation Investment And Is It Smart To Invest In It?


A rent to serviced accommodation investment involves renting properties with the intention of sub-letting them out on a short-term basis to travelers and tourists. These properties, which can range from apartments to houses, are fully furnished and equipped with amenities and services comparable to those found in hotels. 

The concept has gained popularity due to the rise of platforms like Airbnb and the increasing demand for alternative accommodations.


One of the key advantages of investing in rent to serviced accommodation is its income potential. Short-term rentals often command higher rental yields compared to traditional long-term rentals. Travelers are willing to pay a premium for the convenience, flexibility, and amenities provided by rent to serviced accommodation. This can result in attractive returns for investors, especially in high-demand areas or popular tourist destinations.


Flexibility is another appealing aspect of rent to serviced accommodation investment. Unlike long-term rentals, investors can utilize the property for personal stays while renting it out for the remaining time. This flexibility allows for increased usage and the potential to generate income streams from short-term rentals. Investors can also adjust their rental rates based on seasonal demand, events, and market conditions, giving them greater control over their investment.


However, investing in rent to serviced accommodation does come with considerations. Market demand is a crucial factor to evaluate. Researching the local tourism industry, business activity, and the popularity of the area among travelers can help gauge the investment’s viability. It is important to assess the competition, potential risks, and challenges in maintaining high occupancy rates.


Additionally, managing a rent to serviced accommodation property requires ongoing attention. Investors must handle guest bookings, ensure property maintenance, and provide satisfactory customer service. This may require time, resources, and skills, depending on the investor’s capabilities. Some investors opt to work with property management companies to handle these operational aspects, but it is essential to consider the associated costs and find reputable service providers.


Ultimately, the decision to invest in rent to serviced accommodation should be based on a comprehensive analysis of various factors, including market demand, rental yields, personal circumstances, and risk tolerance. Thorough research, understanding local regulations, and consulting with professionals can help investors make an informed choice. While rent to serviced accommodation investment can offer significant benefits, it is crucial to assess the specific opportunities and challenges of each property and location to determine if it aligns with the investor’s goals and preferences.


Understanding the Market and Identifying Demand

To make an informed decision, it is crucial to understand the market and identify the demand for rent to serviced accommodation in different areas. Conduct thorough research and analyze factors such as tourism, business travel, and local events that attract visitors. Look for regions with a steady influx of tourists or business travelers throughout the year.


Proximity to Key Attractions and Amenities

When choosing a location, proximity to key attractions and amenities plays a vital role. Consider areas that offer easy access to popular tourist spots, business districts, transportation hubs, shopping centers, restaurants, and entertainment venues. Tenants prefer locations that provide convenience and a vibrant local atmosphere.


Research Local Regulations and Zoning Laws

Before finalizing a location, it’s essential to research local regulations and zoning laws. Some areas may have specific regulations or restrictions on short-term rentals or rent to serviced accommodation. Ensure that the location you choose allows for this type of investment and complies with the necessary legal requirements.


Analyzing Competition and Market Saturation

Analyze the competition in the chosen area to understand the market saturation. While some competition is healthy, too many similar properties can lead to increased competition for guests and lower occupancy rates. Look for areas with a moderate level of competition, which indicates a healthy demand for rent to serviced accommodation without oversaturation.

Consider Seasonality and Market Trends

Consider the seasonality and market trends of the location you are evaluating. Some areas may experience high demand during specific times of the year due to seasonal events, festivals, or conferences. Understanding the market trends will help you optimize your property’s performance and maximize your return on investment.

Evaluate Economic Stability and Growth Potential

The economic stability and growth potential of a location are crucial factors in choosing the right investment destination. Look for areas with a strong and diverse economy, low unemployment rates, and positive growth indicators. Such locations provide a solid foundation for sustained demand and potential appreciation of your property’s value over time.


Assessing Infrastructure and Transportation

Infrastructure and transportation are key factors in attracting guests to rent to serviced accommodations. Evaluate the quality of roads, public transportation, and proximity to airports or train stations. Easy accessibility and connectivity enhance the appeal of your property and make it more appealing to both business and leisure travelers.

Seek Professional Advice and Local Expertise

While conducting your research to choose the best location for your rent-to-serviced accommodation property, it’s highly recommended to seek professional advice and tap into local expertise. Real estate agents, property management companies, and market analysts can offer valuable insights into the rental market and investment opportunities within specific areas. They possess in-depth knowledge of local market conditions, including supply and demand dynamics, rental rates, and occupancy trends. 

Moreover, their expertise extends to understanding the specific nuances of different locations, such as the preferences of local and international travelers, popular neighborhoods, and potential growth areas. By consulting with professionals and leveraging their knowledge, you can gain a comprehensive understanding of the market, identify lucrative opportunities, and make informed decisions based on reliable data and insights. Their guidance can prove invaluable in selecting a location that not only matches your investment goals but also ensures long-term profitability and success in the rent-to-serviced accommodation sector. 


Choosing the best location for investing in a rent to serviced accommodation property requires careful consideration of various factors, from market demand and competition to infrastructure and local regulations. By understanding the market, analyzing trends, and seeking expert advice, you can make a sound investment decision that maximizes your returns and positions your property for long-term success.


Remember, success in the rent to serviced accommodation industry goes beyond location selection. Maintaining high standards of service, offering unique amenities, and delivering exceptional guest experiences are equally vital in ensuring the profitability and sustainability of your investment.


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Established in 2019, Star Sterling is a family-run business based in the UK. As a cutting-edge investment advisory firm, we aim to deliver top-of-the-line investment services to all our valued clients. Leveraging a dynamic combination of finance and real estate expertise, we specialize in B2SA, R2SA, and BTL property investments.
Our professionals work tirelessly to identify the best investment solutions for estate agents, landlords, and investors and cultivate long-term partnerships for future success. We partner with businesses to find suitable properties to provide premium accommodation on a short-term basis to business travelers and contractors. By creating customized strategies for our clients, our services extend beyond the traditional confines of real estate

Our Typical Investors are

✓ People with a minimum of £7,500 to invest into Rent To Serviced Accommodation and £50,000 into Below Market Value property deals
✓ Looking to build high cash-flowing Rent To Serviced Accommodation portfolio (either passively or self-managed)
✓ Looking to buy Below Market Value residential properties with 8% to 10% annual return on capital
✓ Looking to achieve financial freedom through property investment in the UK
✓ Looking for safe and secure investment opportunities with low risk
✓ Looking to build a legacy for their family’s future

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