What’s Next For Your Buy to Let Property?
Have you got a Buy to Let property that you’re struggling to find a tenant for? Or you find that you have more short term tenancies as opposed to long term tenancies with weeks without a tenant occupying your property?
If that is the case, another option for your property is turning it into a serviced accommodation. Similar to a buy to let, a service accommodation can bring in higher revenue and could be a full house the majority of the time.
What is a serviced accommodation?
A serviced accommodation is a type of property that is furbished for short term or long term stays and can provide amenities, housekeeping and a range of services for the guest.
It’s similar to staying in a hotel or a Bed and Breakfast but the guests will have the place to themselves and most likely have more facilities than a hotel room such as a washing machine and a kitchen.
Additionally, you’re not expected to stay at the property the whole time during the duration of your guest’s stay like you experience at Hotels.
These types of accommodation tend to attract those who are away for work and looking to cut on costs by staying in a property that has a home facilities available (e.g. saving money by not eating out each night, paying for someone else to do your washing etc).
What’s the charge difference between a buy to let and serviced accommodation?
A buy to let property is a property that you rent out to a tenant over a long period of time, usually for at least 6 months. However, you can choose to have a month by month rental agreement as well as choosing whether to rent the property out furnished or unfurnished.
With a buy to let property, you will have more of a guaranteed monthly income as you receive rental payments each month. On the other hand, serviced accommodation you could find that you receive a varied amount each month depending on how booked up your property is throughout the month.
What are the benefits of serviced accommodation?
UK staycations are here to stay
The news lately has been filled with stories about airports being understaffed, flights being cancelled and at the back of everyone’s mind is whether or not COVID travel restrictions will come back in place.
Therefore, many holidaymakers are going for a UK based holiday as there is less risk of it being cancelled. Plus during lockdown, 3.2 million pets were homed in the UK and the large majority of those would have been dogs. With dogs being a critical part of the family, people are looking for accommodation that will allow their dogs to enjoy some quality family time too.
High demand if there is a concert, festival or near a wedding venue
If you have a property in a city, you will probably be aware that there is always something going on. For example, in Manchester they had Park Life Festival, Ed Sheeran and the usual crowds that the city attracts all in one weekend.
With most hotels being fully booked, people were still looking for a place to stay and this is where serviced accommodations can step in. For a Friday night in July, a Private room in Greater Manchester costs £70 and a 2 bedroom Apartment for 4 guests costs £130.
Additionally, if you have a property near a popular wedding venue, we expect it to be booked a high proportion of the time as more families find it easier to stay in a house type property instead of a hotel room.
For example, a Cottage near popular venue Combermere Abbey is £158 per night and according to AirBnB the property is booked up most of the year. But there is even private rooms within properties that are going for £70 – £90 per night.
5 days booking could be the same as one month rent
If you were to figure out how much it is per a night for your buy to let, it’s most likely not to be a lot. Whilst for a serviced accommodation listed on Air BnB, the average charge per a night is £100, depending on the area.
You can charge more
With serviced accommodations, you’re more than likely able to charge more per night compared to renting it out as a buy to let:
Buy to Let
Potato Wharf, Castlefield, Manchester
- Fully furnished
- Two double bedrooms
- Integrated modern kitchen, ensuite & main bathroom
- All private
- £1,300 pcm
AirBnB
Potato Wharf, Castlefield, Manchester
- Fully furnished
- 1 private bedroom
- Shared living and kitchen area
- Private bathroom
- £1,680 for the whole month (including a 25% discount as it’s a month long booking).
These two properties are in similar areas but the buy to let property has more facilities, space and more to offer however cost less per a month in comparison to the AirBnB property.
The two have their own sets of pros and cons such as Buy to Let property, you will have a tenant in there for an agreed amount of time and may involve less work. Therefore, you will have the secure of knowing you will have the same amount of rental income every month for as well as the agreed tenant agreement.
Whilst for the AirBnB property, you may have a new guest in there every two days so you will be expected to clean the property for every new guest. However, if people are booking weekend or one night stays, you could probably charge than more per a night. Furthermore, you could be faced with having days or weeks with no guests meaning no income.
Is your property suitable to be a serviced accommodation?
You may currently rent out your property as an unfurnished property but when it’s a serviced accommodation, you will need to make sure that’s it’s fully furnished and has everything that your guest may need. From beddings and towels to toiletries and knives and forks.
After each guest, you will need to conduct a clean so it’s ready for the next guest. Depending on the length of your stays, you may find yourself cleaning or sending a cleaner in every other day.
Referencing:
3.2 Million Pet: BBC News
Apartment in Manchester City Centre: AirBnB
Potato Wharf Renting: Right Move