Unlocking the Secrets: How Serviced Accommodation Can Increase Your Property Income by 20 to 40 Percent

Investing in property offers many ways to generate income, but one approach stands out for its potential to significantly boost returns: serviced accommodation. Property owners who switch from traditional long-term rentals to short-term, fully furnished serviced lets often see income increases between 20 and 40 percent. This post explores how serviced accommodation works, why it can deliver higher income, and what you need to consider before making the change.

Modern serviced apartment living room with stylish furniture and natural light

What Is Serviced Accommodation?

Serviced accommodation refers to fully furnished properties rented out on a short-term basis, often for days or weeks rather than months or years. These properties come equipped with essentials like furniture, kitchenware, and linens, and sometimes offer additional services such as cleaning, Wi-Fi, and concierge support.

Unlike traditional rentals where tenants sign long leases, serviced accommodation targets travelers, business visitors, or anyone needing temporary housing. This model blends the flexibility of hotels with the comfort and privacy of a home.

Why Serviced Accommodation Can Boost Your Income

Higher Nightly Rates

One of the main reasons serviced accommodation can increase income is the ability to charge higher nightly rates compared to monthly rents. For example, a property rented for £1,000 per month traditionally might earn £50 per night as a serviced let. If rented for 20 nights in a month, that’s £1,000, but with occupancy rates often exceeding 70%, income can rise substantially.

Increased Occupancy Flexibility

Short-term lets allow owners to adjust pricing based on demand, season, or local events. This flexibility means you can maximize income during peak periods, such as holidays or conferences, when demand and prices spike.

Multiple Income Streams

Some serviced accommodation owners add value by offering extras like airport transfers, guided tours, or premium amenities. These services can generate additional income beyond the rental itself.

Example: London Property Income Comparison

A two-bedroom flat in London rented traditionally might bring in £1,500 monthly. Converted to serviced accommodation, charging £100 per night with 75% occupancy, the monthly income rises to approximately £2,250. That’s a 50% increase, even after accounting for extra costs like cleaning and utilities.

What Costs to Expect with Serviced Accommodation

While income potential is higher, costs also increase. Key expenses include:

• Furnishing and equipment: Quality furniture, kitchenware, and linens are essential.

• Cleaning and maintenance: Frequent turnovers require regular cleaning and upkeep.

• Utilities and internet: Typically included in the rental price.

• Management fees: If using a letting agent or management company, expect fees around 15-25% of rental income.

• Marketing and booking platforms: Listing on sites like Airbnb or Booking.com may involve commission fees.

  
  

Despite these costs, many owners find the net income still exceeds traditional rental returns by 20 to 40 percent.

How to Prepare Your Property for Serviced Accommodation

Invest in Quality Furnishings

Comfort and style attract guests and encourage positive reviews. Choose durable, easy-to-clean furniture and neutral decor to appeal to a broad audience.

Create a Welcoming Experience

Small touches like welcome packs, clear instructions for appliances, and local guides improve guest satisfaction and encourage repeat bookings.

Ensure Compliance with Regulations

Short-term rentals often require specific licenses or permissions depending on your location. Check local laws to avoid fines or legal issues.

Use Professional Photography

High-quality photos increase booking rates by showcasing your property’s best features.

Managing Serviced Accommodation Efficiently

Managing short-term lets can be time-consuming. Consider these options:

• Self-management: Handle bookings, cleaning, and guest communication yourself. This saves fees but requires time and effort.

• Property management companies: They handle everything for a fee, ideal if you own multiple properties or lack time.

• Automated tools: Use software for calendar syncing, pricing adjustments, and guest messaging to streamline operations.

  
  

Risks and Challenges to Consider

• Vacancy periods: Income depends on occupancy. Slow seasons can reduce earnings.

• Wear and tear: Frequent guest turnover increases maintenance needs.

• Regulatory changes: Laws on short-term rentals can change, affecting your ability to operate.

• Neighbour relations: Noise or guest behavior can cause complaints.

  
  

Planning and good management help mitigate these risks.