Common Questions for Serviced Accommodation Beginners

If you are new to serviced accommodation or looking for your first serviced accommodation management company then it is likely you’ll have questions. After all, it is something new and certainly not as straight forward as just letting out a single BTL. Here as the most common questions serviced accommodation beginners ask.

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Serviced accommodation fundamentals you probably want to know

Serviced accommodation can be an extremely steep learning curve at first, especially for those who haven’t studied about it or worked with it before. That’s why we’ve prepared a list with questions frequently asked by those new in this industry. These questions will also help you forget about some of the myths in the SA business. Here are the most common questions we get asked:

  1. How much of my time will it take?
  2. Will I make less due to cleaning costs?
  3. What profit should I expect?
  4. What level of occupancy should I expect?
  5. Do I need any specialist insurance?
  6. What property compliance and legislation do I need?
  7. How much do you charge for management?
  8. Do I need a specialist mortgage?
  9. Do holiday let mortgages cost more?
  10. Will I make less due to VAT on my sales like when booking a hotel?
  11. What is the difference between guaranteed rent and management only?

Knowledge and experience overcome most Serviced Accommodation myths

clock above desk in apartment

1. How much of my time will it take?

If you are doing it alone, it will take some time. But most people who start in this business prefer to go for SA management companies.

In this case, it will take nothing of your time, especially if you choose us as your SA management company. We can do anything for you and your SA business, including:

  • Helping you find the right property.
  • Setting up a new property (furnishing, dressing, etc).
  • Fully managing, including bills.

Of course if you self manage, then it will take a lot of time. After all, it is more like hospitality than property letting.

2. Will I make less due to cleaning costs?

No! You won’t need to worry about these costs, because the guests pay them as an additional charge.

3. What profit should I expect?

Of course, it will depend on many elements such as area, type of guests, among others. If you are interested in getting an assessment, let us know, and we’d be happy to have a conversation.

professional cleaning sign on floor
money in jar

4. What level of occupancy should I expect?

The same answer as above. Please send us an email or give us a call. We can provide you with an estimate.

 

5. Do I need any specialist insurance?

A really common question for those new into serviced accommodation is on insurance products. It is always recommended to get a holiday let insurance and permitted use with building insurance. There are specialist products that can also be a good option for those interested in further protection against guest damages and loss of earnings.

6. What property compliance and legislation does serviced accommodation require?

While serviced accommodation is mostly unregulated, it doesn’t mean that you can or should just rent out any property. Yes, because of that, SA businesses are quicker to start if compared to HMO. However, property compliance requirements, such as EICR and gas safety are essential.

Although it is not legally required, we utterly recommend added safety in your properties to improve the standards and provide the safety of guests. We always advise installing fire doors and lightning, for instance.

7. How much do you charge for management?

We charge a competitive price in the market: 15%. Within our fees, you also have access to channel manager costs, dynamic pricing and the option of utility bill management.

To compare with a letting agent that charges 10% for a tenant for 12 months, the level of on-going work for SA is far higher. Letting agents also charge new tenancy fees to landlords where we don’t.

legal requirements and compliance
wooden houses in a line

8. Do I need a specialist mortgage?

Yes, you will require a holiday let mortgage or a product that permits use as a holiday let.

 

9. Do holiday let mortgages cost more?

Yes and no.

Although holiday let mortgages are usually a little higher than BTL mortgages, if you own it in a personal name, then all interest is deductible. This makes holiday lets far cheaper overall than a BTL mortgage. Also, you should always remember that the returns will be higher.

10. Will I make less due to VAT on my sales like when booking a hotel?

As we only provide management, if it is vatable or not, it is based on your ownership. If the property is in a personal name, you would not. If a company owns the property, it depends if the property is VAT-registered.

11. What is the difference between guaranteed rent and management only?

While our guaranteed rent services provide you with a fixed rent income from the property, our management services include handling of bills, letting, management, and maintenance.

To compare with a letting agent that charges 10% for a tenant for 12 months, the level of on-going work for SA is far higher. Letting agents also charge new tenancy fees to landlords where we don’t.

rent due guaranteed rent

Common Questions for Serviced Accommodation

So there you have it, these are the most common questions we get asked from beginners in Serviced Accommodation. What about you – are you new to serviced accommodation? Do you have any different questions?

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