When you think of investing in property, we naturally think of a house, on a buy to let mortgage, where you can generate a rental income of say £650pcm. Have you ever considered how this income can be increased at no expense? Keep reading......

These are pretty standard in the buy-to-let world, but what many investors are coming to realise is that there are a host of new, emerging opportunities.

Chief among these is the growing demand for serviced apartments. Younger generations are driving change in the world of short to medium-term accommodation.

The days of hotels with little more than twin beds and a kettle are dwindling. Now people want the professional service of a hotel and the home comforts of, well… a home.

It’s no wonder then that the popularity of serviced apartments, which provide the best of both worlds, has risen drastically in recent years.

So, we know that serviced apartments are great for users, but are they a good deal for investors? Well, if you’re pressed for time and want the short answer:
Yes.

If, on the other hand, you want to know why serviced apartments are a good investment, see the detail below....

Higher Rental Opportunities

Money talks in this world, which is why we’ve started by looking at the potential rental yields you could achieve with a serviced apartment.

According to research, long-term residential yields typically come out at 3-4%, compared to serviced apartments that regularly hit 6.5-9%.

This is because serviced apartments typically target a different type of tenant. Serviced apartments attract tourists, businesspeople and others for various reasons, who are happy to pay more to enjoy a spell of luxury, or the comfort of their own space that feels something like home.

For example, an apartment that may be worth £1000/pm could be used as a service apartment at £100 per night. Of course, the usual short stay nature of serviced apartments means you need a higher volume of tenants, but you could make more money in two weeks than you would over a month of traditional renting.

Easier Maintenance

One of the difficulties landlords face with traditional buy-to-let investments is maintaining their property. After all, you may only get to see inside your property every six months. So, if you have a problematic tenant or one that doesn’t notice an issue, by the time you’ve found out about it, it may have already turned into a financial black hole. Serviced apartments solve this problem. After all, the clue is in the title – serviced. This style of investment means that you’ll regularly get access to your property in order to make sure it is clean and ready for the next guest (although we take care of this for you) Even if you have a longer stay tenant, you’ll still be able to keep an eye on your apartment while dusting. That means you can deal with any potential issues quickly and before they turn into a major issue.

Buying in a Good Location

One of the interesting advantages of serviced apartments is the role they play in simplifying the choice of where to invest. Serviced apartments are really only successful in areas where there is a strong tourist or business trade. This is why Plymouth is such a good location for your property to make you money. A great location within the South West with booming seasonal tourist trade, the summer months are a wonderful opportunity to really advertise your property with us.

Simpler to Sell

It seems strange to talk about the ease of selling a property as a reason to buy it, but when it comes to investing, you have to plan for an exit if your circumstances change. When it comes to selling traditional buy-to-let properties, the first decision you have to make is whether to invest any more money to increase its market value. If you’ve had long-term tenants or ones that haven’t looked after the property properly, you may find you have to invest in a full refurbishment just to sell. As we’ve already discussed, serviced apartments allow you regular access, making them far easier to maintain. That means they’re still in great shape when you come to sell and you can get maximum value from your investment. We can help here too, with our experience sales team.

Is a Serviced Apartment Right for You?

If you like what you hear so far then get in touch with us at James Estate Agents, to speak to one of our friendly consultants. We can advise on your current situation, help in improve your property portfolio and income.