You may be aware of the current surge in investors running serviced accommodation. With the ease of advertising your property on the internet and airbnb becoming ever more popular, it is no surprise why everyone is turning to this strategy to maximise the income from their assets.
But how do you turn it from a hobby (like this 96 year old pensioner) to a systemised, outsourced business bringing in profit with military precision (SAS!)?
First of all you need to know why investors are switching to this strategy and the simple answer is higher returns.
Lets look at an example for a 2 bed flat costing £225K:
As a Single Let: Income £900 - Mortgage/Insurance £725 = Net Profit £175
As a Serviced Apartment: Income average £110 per night x 30 nights x conservative 80% occupancy = £2,640 - Mortgage/Insurance £735 - Bills/Cleaning/Laundry etc £725 - Booking Fees £275 = Net Profit £905
A 517% increase in monthly profits sounds great, but are you ready for the increased workload to match this? Customer enquiries, customer management, calendar management, advertising on your own website and on multiple channels, marketing to your customer database, cleaners, laundry, consumables, chasing payments from different countries, getting reviews, managing check outs, repairs and maintenance.
It is true to say that running serviced accommodation is a business, especially compared to the minor management required for single lets, and is run more successfully with a hired team.
Without the right learning, processes and team in place, investors are not achieving the rates or occupancy they desire for the hard work they have put in. Achieving 50% occupancy makes them worse off than the single let option and with the added work and potential headaches. In addition there are lots of one-off serviced accommodation start-ups competing against each other driving your income down and costs up.
To achieve 90-95% occupancy rates is possible and can be regular, we've experienced it, so getting the right training to make your serviced accommodation venture a success is vital. Knowing how to keep costs down whilst marketing across multiple avenues, all in conjunction with systematising processes and building a team, will definitely realise your serviced accommodation business dreams.
So what are your options: Are you going to stick with your current strategy? Take advantage of this opportunity and make a business out of it yourself? Or JV with someone who is already running serviced accommodation and has the right team in place?
What ever your choice is, make sure you go in to it with your eyes open knowing all that it takes to stick or change.
For a Serviced Accommodation Course recommendation please contact: firstname.lastname@example.org
To JV with Turner Invest in either expanding or transforming your current portfolio contact email@example.com and we will assess your needs to see whether your properties match the criteria of the serviced accommodation brand we are building around the UK.
Turner Invest Directors in the news
The directors of Turner Invest have appeared in the local news this month after organising charity events to support those in need.
Director Stephen Turner teamed up with his mum, Sarah Lambert, to organise a Family fun Sports Day to raise money for the special needs children of Chelmsford Columbus Discovery Club. The money is being raised in order to organise a trip to the beach for these children. Held on the 5th of June, the sports day was a great success with many teams coming along to donate and battle it out in a multi sports competition that ranged from games of sit-down volley ball to an intense tug of war. Local businesses showed their support by donating BBQ food, trophies and prizes for the raffle.
The event was a fantastic display of community spirit and would not have been possible without the support of those who gave up their time to bake cakes, man stalls and referee the games.
In total the sports day raised £800 towards the beach trip and is the first of a possible new annual event. Be on the look out for Columbus Sports Day 2017!
Stephen then ran a 30 mile race in the Lake District covering 10 peaks to raise awareness and further donations for the beach day out for the children. There is still time to donate here:
Not to be outdone, Director Catherine Turner has been helping women in need put their best foot forward into a new job, by providing the shoes for those feet. When it comes to success in job interviews the way we dress is crucial, but what if people can't afford or don't have access to the right outfits? This is what Catherine Turner and Samia Uddin are hoping to address with their Clothes to Empower project.
The project seeks to encourage women from the local communities to put the clothing lying at the back of their wardrobes to good use and donate them as well as shoes and bags to help disadvantaged women dress for success and get into work.
Turner Invest Directors Catherine & Stephen Turner