Serviced accommodation investment: A smart strategy for property owners
The short-term rental market has fundamentally changed how property owners think about their investments. What was once a straightforward choice between long-term tenants and leaving properties vacant has evolved into something far more interesting.
Serviced accommodation investment has emerged as a compelling middle ground, offering landlords the chance to earn significantly more whilst maintaining control over their assets in ways traditional lettings simply don’t allow.
This isn’t just about jumping on a trend. Business travellers still need comfortable bases for extended projects. Tourists want authentic local experiences with more space than a hotel room. Digital nomads require reliable workspaces with proper amenities.
Relocating professionals need somewhere comfortable whilst they settle into new cities. The demand is real, growing, and represents a genuine opportunity for property owners willing to approach their investments strategically.
You can handle operations yourself, work with professional serviced accommodation management, and either way the market potential is substantial. If you’re new to this market, our comprehensive serviced accommodation guide provides everything you need to know about getting started.
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What makes serviced accommodation different
Think of serviced accommodation as the meeting point between a rental property and a hotel. These are fully furnished spaces available for short to medium-term stays, complete with everything guests need to move in immediately.
We’re talking about hotel-like amenities: regular cleaning services, included utilities, Wi-Fi that actually works, fresh linens, and often concierge support for when guests need local knowledge.
The distinction matters because it changes the entire business model. Traditional long-term rentals mean finding tenants, signing year-long contracts, and hoping everything goes smoothly until renewal time. Tenants handle their own cleaning, pay their own utilities, and sort out maintenance issues themselves. You get stable income but limited flexibility and relatively modest returns.
Serviced accommodation flips this dynamic. You’re hosting multiple guests throughout the year, each stay bringing fresh revenue at rates that typically exceed what monthly tenants would pay. The trade-off? You’re providing a service, not just a space. Understanding what a serviced accommodation management company does can help clarify exactly what running this type of property involves, whether you plan to manage it yourself or bring in professional support.
The operational model is fundamentally different too. Instead of one tenant for twelve months, you might host thirty different guests. Each booking requires communication, cleaning, maintenance checks, and quality control. This is where many landlords either thrive or quickly realise they need help.
For a comprehensive look at this property type, our serviced accommodation guide covers everything from setup to operations.
Why invest in serviced accommodation?
So you know what serviced accommodation is and how it differs from traditional letting. The next logical question is: why should you actually invest in it? What makes this model worth the additional complexity and operational involvement compared to finding a long-term tenant and collecting monthly rent?
The answer comes down to three compelling factors that consistently attract property owners to this market. Higher returns matter, obviously, but it’s not just about money. The flexibility to use your own property when you need it whilst still generating income makes this model uniquely appealing for certain ownership situations. And for properties in the right locations, corporate clients provide a revenue stream that combines the best aspects of short-term and long-term letting.
Let’s break down each advantage and what it means for your investment strategy.
Higher income potential
Many landlords ask, “How much profit should I earn on a rent-to-serviced accommodation (R2SA)?”. While it varies, net yields are often considerably higher than traditional lets.
Traditional landlords typically see annual yields between 3% and 6% on residential properties. Serviced accommodation can push that to 8%, 10%, or even higher in strong markets. The mathematics work because nightly rates generate more revenue over time, even accounting for vacancy periods and higher operating costs.
Profitability gets maximised through smart operational choices. Dynamic pricing adjusts rates based on market demand, local events, and seasonal patterns. Listing across multiple platforms like Airbnb, Booking.com, and Expedia increases visibility and bookings. Optional services like early check-ins, late check-outs, or premium welcome packages create additional revenue streams without significant extra costs. For deeper insights into maximising earnings, our guide on serviced accommodation revenue management covers proven strategies.
Flexible usage
Serviced accommodation gives landlords the option to block out time for personal use whilst still earning rental income during the rest of the year. This flexibility is ideal for second homes in coastal areas, mountain retreats, or properties in tourist destinations where you want occasional personal access without sacrificing investment returns.
You can also adapt availability around seasonal trends. Peak tourist seasons command premium rates with high occupancy, whilst quieter periods might see you adjusting pricing strategies or taking time for property improvements. This level of control simply doesn’t exist with traditional tenancies, where properties are legally occupied for fixed terms.
Appealing to corporate clients
Business serviced apartments attract longer, more predictable bookings from companies relocating employees, housing project teams, or accommodating professionals on extended assignments. These corporate bookings tend to be less price-sensitive than tourist bookings and value reliability, professional service, and practical amenities over trendy design features.
For property owners looking to invest in serviced apartments, targeting the corporate market can provide more stable cash flow compared to purely tourist-focused properties. Companies often book months in advance, pay promptly, and return regularly when they’re satisfied with the service.
Offering features like dedicated workstations with ergonomic chairs, high-speed Wi-Fi that can handle video calls, central locations near business districts, and flexible booking terms enhances appeal to this audience.
Building relationships with local companies, recruitment agencies, and relocation services can create steady revenue streams that balance the seasonal fluctuations of tourist bookings.
Key considerations for investors
Insurance
Standard landlord policies aren’t suitable. Instead, insurance should cover:
- Guest stays
- Public liability
- Accidental damage
- Loss of income due to cancellations or property damage
Management
Landlords can choose between full-service management or hybrid options. Partnering with experts such as GuestReady ensures:
- Professional guest communication
- Housekeeping and maintenance
- Pricing optimisation using data-driven tools
Legal and regulatory compliance
Regulations vary. Key areas to address include:
- Planning permissions
- Health and safety standards
- Short-let licensing
Non-compliance can result in fines, so staying informed and supported is essential.
Serviced vs non serviced accommodation
The comparison between serviced and traditional accommodation affects how you think about your property, what returns you can expect, and how involved you need to be in daily operations.
Serviced accommodation typically supports short to mid-term stays ranging from a few nights to several months. It includes full guest amenities like regular cleaning, fresh linens, maintenance support, and concierge services. Income potential is variable because it depends on occupancy rates and dynamic pricing, but yields are generally higher than traditional lettings when managed well.
Landlord involvement is moderate to high unless you outsource operations to professional management.
Non serviced accommodation caters to long-term tenants who sign contracts for six months, a year, or longer. Tenants manage their own utilities, handle their own cleaning, and sort out minor maintenance themselves. Income is stable and predictable but yields are lower because monthly rents don’t match the cumulative revenue from nightly rates.
Landlord involvement is minimal once you’ve found good tenants, making it genuinely passive income.
Here’s how they compare:
| Feature | Serviced Accommodation | Non Serviced Accommodation |
|---|---|---|
| Stay length | Short to mid-term | Long-term |
| Guest support | Full amenities and services | Tenant-managed |
| Income potential | Variable, high yield | Stable, lower yield |
| Landlord involvement | Moderate to high | Low |
Unique interior design helps properties stand out in crowded markets where guests scroll through hundreds of similar listings. Standout locations near attractions, business districts, or transport links command premium rates and maintain higher occupancy.
Excellent guest reviews build reputations that translate directly into more bookings at better rates, creating a virtuous cycle where quality drives profitability.
The choice between serviced and traditional letting depends on your priorities, property location, and available time. Want maximum returns and don’t mind active involvement? Serviced accommodation makes sense. Prefer simplicity and steady income without operational hassle? Traditional letting is probably better.
Many successful property investors split their portfolios, running serviced accommodation where it works well whilst keeping traditional tenants in properties where location makes short-term letting impractical.
When comparing serviced accommodation vs hotels, remember that your guests are choosing your property instead of booking a hotel room. The advantages you offer typically include more space, proper kitchens, a homelier feel, and better value for longer stays.
Hotels counter with branded reliability, loyalty programmes, and established reputations. Positioning your property effectively means knowing what your target guests actually value.
Launching a serviced accommodation business
To build a strong foundation:
- Research your market: Understand demand, competitors, and optimal price points.
- Prepare the property: Furnish tastefully, ensure legal compliance, and prioritise guest comfort.
- List smartly: Use compelling copy, professional photos, and relevant keywords.
- Deliver service: Provide smooth check-ins, timely communication, and added touches.
- Manage efficiently: Automate where possible and monitor performance metrics.
Future trends and opportunities
The serviced accommodation industry continues evolving rapidly, creating opportunities for property owners who stay informed and adapt strategically.
Smart technology
Contactless entry through digital locks eliminates the logistics of key exchanges and allows flexible check-in times that guests appreciate. Automated messaging handles routine communications like booking confirmations, check-in instructions, and checkout reminders whilst maintaining personal touches for substantive questions.
Smart thermostats reduce energy costs whilst ensuring guest comfort. IoT sensors can detect maintenance issues like water leaks before they cause serious damage.
The technology exists to streamline operations significantly. The question is which tools actually improve guest experience and operational efficiency versus adding complexity without corresponding benefits. Focus on technology that solves real problems rather than adopting innovations just because they’re trendy.
Sustainability
Guests increasingly seek eco-friendly accommodation, and properties with genuine green credentials command premium rates in many markets. This might include energy-efficient appliances that reduce running costs, water conservation measures through low-flow fixtures, renewable energy like solar panels, comprehensive recycling programmes, or sustainable cleaning products that perform well whilst minimising environmental impact.
Investment in sustainability often pays back through both reduced operating costs and increased appeal to environmentally conscious guests who book longer stays and leave better reviews. This isn’t just marketing; it’s increasingly what guests expect and what regulations require.
Hybrid living and remote work
Demand is growing from digital nomads and remote workers who need reliable workspaces, excellent Wi-Fi, comfortable chairs, good lighting, and longer-term booking options at reasonable rates. These guests represent steady occupancy through mid-term stays that balance the higher income of tourist bookings with the stability of traditional lets.
Properties that cater specifically to this audience through dedicated workspaces, reliable connectivity, and flexible booking terms can build consistent revenue streams in an expanding market segment that shows no signs of slowing.
Niche markets
- Pet-friendly serviced accommodation remains undersupplied in most markets despite strong demand from travellers who won’t leave pets behind.
- Accessible properties designed thoughtfully for guests with disabilities command premium rates and build loyal customer bases in an underserved market. Family-focused apartments with proper facilities for children fill a gap between hotels and holiday rentals.
- Co-living spaces blend serviced accommodation concepts with community elements, particularly in urban areas where young professionals seek flexible housing with built-in social networks.
- Themed stays create memorable experiences that generate strong word-of-mouth marketing and repeat bookings.- Wellness-focused properties attract guests seeking healthier travel experiences through amenities like yoga spaces, healthy food options, and calming environments.
Identifying and serving specific niches well often beats trying to appeal to everyone. Niche positioning allows you to charge premium rates, reduce competition, and build strong reputations within specific communities.
Making your investment work
Serviced accommodation investment offers property owners genuine opportunities to increase income substantially, maintain operational flexibility, and build businesses that scale across multiple properties and markets.
The returns can be compelling when properties are located appropriately, set up professionally, and managed effectively. But success requires proper planning, adequate capital for quality furnishings and setup, and either significant time commitment for self-management or realistic budgeting for professional management fees.
Serviced apartments investment differs from traditional property investment in important ways. You’re not just buying an asset and collecting rent; you’re operating a hospitality business that requires active management, quality control, and strategic marketing. The reward for this additional involvement is substantially higher returns and greater control over your asset.
Decision-making should be based on honest assessment of your situation rather than optimistic assumptions. Do you have properties in locations where serviced accommodation makes sense? City centres, tourist destinations, areas near corporate parks, and regions with consistent visitor demand work well. Suburban family homes in quiet residential areas probably don’t.
- Can you afford the upfront investment in quality furnishings, professional photography, proper licensing, and adequate insurance? Cutting corners on setup creates ongoing problems that cost more in lost bookings and poor reviews than proper preparation would have cost initially.
- Do you have the time, skills, and inclination to manage operations yourself? Be realistic about what’s involved: responding to messages promptly, coordinating cleaners reliably, handling maintenance issues quickly, optimising pricing constantly, and managing guest expectations professionally. If you don’t have the time or interest, factor professional management costs into your projections from the start rather than burning out and seeking help later.
Treating serviced accommodation as a business rather than just a property let makes the difference between properties that thrive and those that struggle. Guest satisfaction, operational efficiency, pricing strategy, marketing effectiveness, and quality control all matter. Properties that consistently deliver excellent experiences build reputations that translate directly to higher occupancy rates, better average nightly rates, and sustainable profitability.
Partner with GuestReady for serviced accommodation success
At GuestReady, we’ve helped hundreds of property owners transform their investments into profitable serviced accommodation businesses across multiple markets and property types.
