From Renting to Profiting- Serviced Accommodation Can Change Your Financial Future
Investing in serviced accommodation is a great alternative to the more common real estate investment strategies, such as buying and selling, real estate investment trusts, etc.
What exactly are “serviced accommodations”? Serviced accommodation is similar to a hotel room, a fully furnished apartment, a workspace, and other similar items.
In common parlance, serviced accommodation is a sort of accommodation facility that allows individuals to stay for a couple of days or longer (such as a couple of months or even years) with additional amenities compared to standard accommodation houses.
The terms “Serviced Accommodation” and “Serviced Apartment” are frequently used interchangeably, especially when the property is situated in an apartment building.
The primary purpose of a serviced accommodation (or serviced apartment) is to provide access to all the features and amenities of high-end hotel rooms with the added space and comfort of standard flats.
THE BENEFITS OF INVESTING IN SERVICED ACCOMMODATION?
When properly maintained, serviced flats are one of the best real estate investments for beginners. These are the perks:
High Rental Returns
Your agreement typically includes a fixed price, which has numerous benefits. In the first place, it allows you to better manage your cash flow because you do not have to budget for unforeseen maintenance concerns. In comparison to residential investments, rental yields may be substantially higher.
These profits can sometimes be twice as high as those from investing in a residential investment.
Guaranteed Rental Income
The possibility of vacancy is one of the primary obstacles to investing in real estate. A few months without tenants might spell financial ruin for new landlords.
This is not an issue with serviced flats because the operator is responsible for finding tenants. You lease the apartment to the operators via a leasing agreement. As a result, the agreed-upon set amount is paid regardless of whether someone is residing in the unit.
No Maintenance And Repair Work Is Required
Continuous upkeep is one of the largest expenses for a real estate investor. Budgeting for maintenance is one of the fundamentals of real estate investment.
with the exception of investing in serviced flats. Again, the operator is responsible for maintaining the apartment’s decent condition. This implies that you spend no time dealing with tenant issues or searching for contractors.
FACTORS TO CONSIDER
Before making an investment in serviced accommodation, there are a number of factors to consider. In the case of serviced apartments, guests are seeking a home that is not their own residence.
This indicates that they desire a variety of amenities that will make them feel at home. Consequently, the property should incorporate the following features.
• Whenever possible, it is preferable to have a separate bedroom or two as opposed to combining the bedroom and living space in a single room. This will provide a sense of accessibility to a wide area while protecting the guest’s privacy.
• A beautiful kitchen equipped with all basic equipment such as plates, pans, pots, and silverware. It is not necessary to have a large number of items, but you must include the essential ones.
• All essential kitchen and bathroom appliances, including a stove, dishwasher, washer, water heater, and water purifier.
• No matter what you offer, the tenant must have access to certain amenities, like a television, Wi-Fi, refrigerator, and air conditioner (optional in cold climate areas), among others.
• Rather than charging extra for energy and water, it is preferable to include these in the monthly rate.
• It is preferable to have cleaning and laundry services available for those who require them.
When it comes to serviced apartments, a property with all of the aforementioned characteristics is regarded as ideal.
As the number of people traveling across the world rises, businesses that provide luxurious lodgings in prime tourist areas stand to gain significantly.
It has been shown that on average, guests stay in serviced apartments for a minimum of 14 nights. This holds true for around 91% of serviced apartments worldwide.
For investors interested in serviced apartments, this would suggest the possibility of generating reliable and consistent revenue.
In comparison to other forms of conventional lodging, serviced apartments are acquiring a significant amount of appeal (specifically short-time stays).