As mentioned last month we are doing a Serviced Accommodation special as this month we celebrate our 2 year anniversary of our first Serviced Apartment going live. This lead us to create a business that now not only profits us (while working on the business for just 4 hours a week) but also for our investors and our team.
Firstly, what is Serviced Accommodation (SA)?
It is short term accommodation, either flats or houses, that can be let out to individuals or groups from 1 to any number of nights. There are many operators across the UK and you will see them on Airbnb, booking.com and many other booking portals.
How did we get started?
We took our first single let and decided to test it as a Serviced Apartment for 3 months… well what do you know, we were full for the entire time and it was safe to say this worked. In doing so, we increased the net cashflow from £200 pcm to £1200 pcm! And at one point we were considering selling this property…thank goodness we didn’t.
Since then our Serviced Accommodation business has flourished. Focussing on this property investment strategy has paid dividends, as we have grown from 1 Serviced Apartment in Chelmsford 24 months ago to 22 across Essex, Suffolk, London & Kent.
What does Serviced Accommodation provide?
SAs provide a range of stakeholder benefits:
To the Landlord – either a guaranteed rent by a SA operator (such as ourselves) or an increased return each month by running the property more like a business than a single let
To the SA operator – the ability to grow a property business and brand that maximises the amount you can make from a property while at the same time getting instant feedback from your customers on the service you provide.
To the investor – a hands-free investment in to a Serviced Apartment that they get a profit share of each month
To the guest – a more ‘home from home’ place to stay for the duration of their trip and, hopefully, recommend and re-book!!
We decided to specialise our Serviced Accommodation business to give us focus, the ability to grow fast and the ability to systemise our processes and business to guarantee customer satisfaction for the guest, landlord, agent and investor.
We specialise in providing high quality, serviced apartments to corporates looking to stay in the area for work. We still get other types of booking, but this focus allows us to:
What do the figures look like?
Most people, when it comes to business or property, just want to know the figures!
So here is an example using actual figures for September for 1 of our SAs:
Guaranteed rent to the landlord £700
Commission to agencies and portals £319
Council tax, utilities etc £178
Furnishings (lease finance) & consumables £172
Cleaning & laundry £537
Sub total £1,906
The cost of our team & systems (£1,159)
Of which, our investor got a monthly return of £580
As you can see, some impressive figures & a high return for our investor (who saw a 10% return in just this 1 month).
Why isn’t everyone doing it?
Simply because it is a business not just property investment.
There are a lot more systems, software’s, processes and regulations in place which puts a lot of people off. However, if you have the right education or can joint venture with the right person, you can still make a very profitable investment from Serviced Accommodation.
For us, we are expanding Pure Luxury Living further across the South East. Expanding beyond our current 22 SA units that stretch from Ipswich to Romford, Alexandra Palace to Dartford, and partnering with more investors and landlords to achieve this in 2018.
For you, it depends!
We hope this expanded your knowledge of the opportunity of Serviced Accommodation and has given you some food for thought.
If you would like to know more, please feel free to reply to this email. We can:
We hope you have a Happy Halloween and month ahead,
Catherine & Steve
Turner Invest Directors Catherine & Stephen Turner