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  • Writer's pictureJustina Wyllie

Why Serviced Accommodation?

Investing in real estate is a proven way to grow your wealth, but choosing the right strategy can make a significant difference in your returns. In this blog post, we'll explore why serviced accommodation stands out as an excellent investment opportunity compared to traditional buy-to-let properties or houses in multiple occupation (HMO).

  1. Higher Income Potential: Serviced accommodation offers a compelling advantage when it comes to rental income. By leveraging platforms like Airbnb, , Vrbo you can earn more from short-term rentals compared to long-term tenants. Tourist hotspots and thriving business destinations often fetch higher nightly rates, ensuring greater returns on your investment.

  2. Flexibility and Adaptability: With serviced accommodation, you're in control. Unlike long-term rentals, you have the flexibility to adjust rental rates, availability, and terms based on market demand. This adaptability allows you to optimise your rental income and respond swiftly to changing market conditions, giving you a competitive edge.

  3. Lower Vacancy Risks: One of the downsides of traditional rental properties or HMOs is the potential for extended vacancy periods when tenants move out. Serviced accommodation minimises this risk by attracting a continuous stream of short-term guests. This means fewer void periods, ensuring a more consistent flow of rental income.

  4. Enhanced Property Maintenance: Maintaining the condition of your investment property is crucial. With serviced accommodation, you have greater control over property maintenance. As guests stay for shorter durations, you can regularly inspect and manage the property, ensuring it remains in excellent condition. Plus, by carefully selecting your guests, you can minimise the risk of troublesome tenants often associated with long-term rentals.

  5. Higher Occupancy Rates: If your property is in a popular destination, serviced accommodation can deliver higher occupancy rates. Travellers, business professionals, and individuals attending events or temporary projects often seek short-term accommodations. Capitalising on this demand can result in a steady stream of guests and increased occupancy rates.

  6. Tax Advantages: serviced accommodation offers tax advantages over traditional rental properties or HMOs. You may be eligible for tax deductions on expenses related to operating your serviced accommodation, such as furnishings and utilities. Section 24 also do not apply to serviced accommodation owners. Of course, you have to consult with a tax professional to understand the specific tax implications.

  7. Diversify Your Portfolio: Investing in serviced accommodation allows you to diversify your real estate portfolio. By including short-term rental properties alongside long-term rentals or other investments, you spread the risk and potentially achieve a more balanced and stable income stream as well as significantly increase your cashflow.

When it comes to real estate investment strategies, serviced accommodation shines as a smart choice. With higher income potential, flexibility, lower vacancy risks, and increased control over property maintenance, it offers a compelling alternative to traditional buy-to-let properties or HMOs. By leveraging the unique advantages of serviced accommodation, you can maximise your returns and build a profitable and diversified investment portfolio. Remember to conduct thorough market research, assess financial viability, and seek professional advice to make informed investment decisions.

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