Unveiling the Tricks of Serviced Accommodation

When it comes to investing in the real estate market, the serviced accommodation strategy has been gaining popularity among investors seeking lucrative opportunities.

This strategy involves renting out fully-furnished properties to guests on a short-term basis, providing them with a home away from home experience.

However, there are some key considerations to keep in mind when diving into this market, especially in a city like London where regulations such as the 90-day rule come into play.

Short Term Lets vs. Long Term Lets

Short Term Lets:
Short term lets refer to renting out a property for a few nights or up to a few weeks.

With the rise of platforms like Airbnb and Booking.com, short term lets have become a popular choice for travellers looking for a unique and personalised accommodation experience.

Investors can capitalise on the high demand during peak tourist seasons or events, commanding premium rates for their properties.

Long Term Lets:
On the other hand, long term lets involve renting out a property for an extended period, typically six months or more.

While the rental income may be more stable with long term lets, it may not yield as high returns as short term lets.

Additionally, long term lets provide the convenience of having a consistent tenant without the hassle of managing turnover between guests.

London 90 Day Rule

One crucial aspect to consider when engaging in the serviced accommodation strategy in London is the 90-day rule.

This regulation restricts hosts from renting out their properties for more than 90 days in a calendar year without obtaining planning permission for change of use.

This rule aims to regulate the impact of short term lets on the local housing market and communities.

Investors need to be aware of this limitation and plan their rental schedules accordingly to comply with the regulations.

However, there are many ways to work your way around the 90 day rule, such as: getting long-term guests in the property, typically those who stay for 3 months or more.

These types of guests typically tend to be either corporate, insurance or professionals.

You can also put students in the property during the academic months, then the 3 months in summer you can operate as a short-term rental.

Another strategy around the 90 day rule, which isn’t very common, but possible, is you can live in one of the rooms and rent the other rooms out as short-term lets.

Conclusion

The serviced accommodation strategy offers investors the opportunity to capitalise on the growing demand for flexible and personalised accommodation options.

By understanding the differences between short term lets and long term lets, investors can tailor their strategy to maximise returns while complying with regulations like the London 90 day rule.

As with any investment, thorough research and prudent planning are essential to succeed in the competitive real estate market in the UK.