Maximising ROI: Why Serviced Accommodation Outshines Traditional Rentals

Investors in the property market often face a key decision: should they stick with traditional buy-to-let rentals, or venture into the world of serviced accommodation? While both options have their merits, serviced accommodation has emerged as a lucrative alternative for those seeking higher returns and more flexibility. In this guide, we’ll explore the differences between these two investment models, highlight the benefits of serviced accommodation, and use real-life examples to demonstrate how it can deliver a superior return on investment (ROI).

Higher Rental Yields: The Power of Nightly Rates

One of the most compelling reasons to consider serviced accommodation is the potential for higher rental yields. Unlike traditional rentals that operate on a fixed monthly rent, serviced accommodation allows you to charge by the night, similar to a hotel. This pricing model can significantly boost your income, especially during peak seasons or events when demand is high.

For example, consider a two-bedroom flat in a central location that might rent for ￡1,200 per month as a buy-to-let. The same property, if operated as serviced accommodation, could earn ￡100 per night, bringing in ￡3,000 over a 30-day period. Even after accounting for cleaning and management costs, the difference in income can be substantial.

Flexibility and Control

Serviced accommodation offers a level of flexibility that traditional rentals simply cannot match. With a buy-to-let property, landlords are often tied into long-term tenancies, limiting the ability to adjust rental rates or respond to changing market conditions. In contrast, serviced accommodation allows you to adjust your nightly rates based on demand, ensuring you always remain competitive.

This flexibility extends to property usage as well. If market conditions change or you decide to sell, you can simply pause bookings and regain control of the property. This is particularly valuable in uncertain markets, giving investors the ability to adapt their strategy quickly.

Opportunities for Growth in the Short-Term Rental Market

The short-term rental market has seen significant growth in recent years, driven by platforms like Airbnb and Booking.com. Travellers are increasingly seeking alternatives to hotels, whether for a weekend getaway or an extended business stay. This shift in consumer preferences has opened up new opportunities for property investors who can provide well-managed, comfortable stays.

Real-life examples abound. Consider a property investor who owned a single buy-to-let property that provided a modest income stream. By converting this property into a serviced accommodation, they were able to triple their income over the summer months, attract business travellers during the week, and fill gaps with weekend visitors. This adaptability allowed them to maximise occupancy year-round, unlike the fixed nature of a traditional rental.

Serviced Accommodation vs. Traditional Rentals: A Side-by-Side Comparison

To further illustrate the advantages of serviced accommodation, let’s look at a direct comparison between the two investment models:

The Challenges and How to Overcome Them

While the benefits of serviced accommodation are clear, it’s important to acknowledge the challenges. Managing bookings, maintaining a high standard of cleanliness, and handling guest communication can be time-consuming. However, these tasks can be streamlined using property management software and virtual assistants. Many investors also choose to work with professional management companies to handle day-to-day operations, allowing them to focus on growth.

How We Can Help You Maximise Your ROI

At Noki Stays, we specialise in helping landlords and letting agents turn properties into high-performing serviced accommodations. Our model offers guaranteed income, whether through acquiring properties or renting them for short-term stays. With our experience in managing bookings, maintaining properties, and maximising occupancy, you can enjoy a hands-off investment while achieving higher returns.

Ready to Boost Your Investment Returns?

For property investors seeking to maximise their ROI, serviced accommodation presents a compelling alternative to traditional rentals. With the potential for higher yields, greater flexibility, and access to a growing market, it’s a strategy that can truly transform your portfolio. If you’re ready to explore this opportunity, let Noki Stays show you how to unlock the full potential of your property while ensuring a steady return.