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Is serviced accommodation the future?

Airbnb has a lot to answer for.  The concept of letting a property or even a room in a property to people who need an alternative to a hotel has become an opportunity for investors.

However, there are alternatives to getting rental income as well as serviced accommodation.

Homes of multiple occupancy

If your property is suitable and you know what it needs to get an HMO licence from your local authority, this can be a great way to make a good income.  It’s a step beyond a shared house arrangement; most tenants in an HMO will expect locks on the doors to their rooms, an ensuite and at least a kettle – and maybe a microwave – in their rooms.

Clearly an HMO with four tenants is likely to make more income than a four bedroom house let to a single tenant.  Getting a BTL mortgage for an HMO will probably require some expert advice from a specialist broker.

The plus is that tenants tend to be long-term, often people who are working a long way from home and use it as their weekday residence, or single professionals who are more focused on their career than on their own place to live.

The con is that you need to know there is a demand in the area you plan to have your HMO.  In some areas it works extraordinarily well, in others it’s hard to find tenants.  Do your homework first.


Having a B&B is often a dream people have – but before you embark on this as an investment option you’ll need to think about:

Will your experience satisfy a lender that you can keep your rooms occupied and service the loan?

  •  Who will cook breakfast 7 days a week? Are you going to do that yourself or hire someone to do it?
  •  Who will clean the rooms daily and change and wash sheets and towels?  Will you do this in house or hire cleaners and engage a laundry service.
  •  What happens when you want to go on holiday?  If you’re doing the work do you have someone who can take over reliably?
  •  How will you find occupants?  Do you have a strategy to continue to keep people coming?

Short-term lets

This is the Airbnb model – one or more properties that you let to people who are visiting the area for a day or a few days and want somewhere as a base.  I’ve used the services of these myself and found them generally excellent.  However, on the other end of the equation the owner had to:

  •  Have the place cleaned after every let
  •  Change linen after each let – or every few days for longer lets
  •  Replenish the kitchen basics – tea, coffee, sugar, etc. 
  •  Check the place over for damage and ensure everything is working after every let

Like a B&B you need to have a plan – and reliable people if you’re not doing it yourself.  It pays to have a company rather than a one-man-band, so you’re covered for sickness and holidays.

Again you’ll need to satisfy a lender that you have a means to keep your property occupied sufficiently to service the loan.  That means historic records either for the property (if owned by someone else) or experience of your own in the same kind of situation.

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