top of page
  • Writer's pictureRobin Lawson

Is Serviced Accommodation the Right Property Investment Solution For You?

Updated: 2 days ago

Investing in Serviced Accommodation in Newcastle and the North East


A Lucrative Property Investment Solution


Are you considering diversifying your property investment portfolio in Newcastle and the North East? Investing in serviced accommodation could be the right property investment solution for you. This dynamic form of property investment offers potentially higher returns compared to traditional buy-to-let, but it also comes with its own set of challenges. Let's delve into the specifics of investing in serviced accommodation in this vibrant region.



Understanding Serviced Accommodation


Serviced accommodation sits somewhere between traditional rentals and hotels. It includes properties listed on platforms like Airbnb, catering to both holidaymakers and business travelers. Unlike long-term lets, serviced accommodation is rented out on a short-term basis, often commanding higher nightly rates.


In Newcastle and the North East, the demand for serviced accommodation is on the rise, driven by the area's growing popularity among tourists and business visitors. However, investing in serviced accommodation requires more than just purchasing a property – it's about offering a service.


The Advantages of Investing in Serviced Accommodation


One of the main attractions of serviced accommodation as a property investment solution is the potential for higher returns. Average yields from serviced accommodation can range from 6% to 9%, significantly higher than traditional buy-to-let properties. For instance, if you charge £100 per night, you could potentially earn £3,000 in a month, far exceeding the returns from a standard rental.



In Newcastle and the North East, the appeal of serviced accommodation is amplified by the area's diverse attractions, from the cultural hotspots in Newcastle to the scenic beauty of the Northumberland coast. High occupancy rates can be achieved, particularly in well-located properties that cater to tourists and business travelers alike.


The Challenges of Investing in Serviced Accommodation


Despite the attractive returns, investing in serviced accommodation comes with its challenges. One significant consideration is maintaining a high occupancy rate throughout the year to ensure a steady income. Unlike traditional rentals where tenants may stay for months or years, serviced accommodation requires frequent guest turnover, which means constant marketing and management.



Financing a serviced accommodation property can also be more complex. Standard buy-to-let mortgages are not suitable; instead, you'll need a commercial mortgage. This type of finance is designed for business operations, reflecting the nature of serviced accommodation as more of a business venture than a passive investment.


Managing Your Serviced Accommodation


Effective management is crucial to the success of serviced accommodation. This includes handling bookings, providing amenities such as clean linens and towels, and ensuring the property is cleaned between guests. The level of service expected by guests can make managing serviced accommodation a full-time job.


Owner looking stressed at computer managing bookings in a serviced accommodation property investment solution.
Managing bookings can be stressful, but it's a crucial part of running a successful serviced accommodation property investment solution.

In Newcastle and the North East, several property management companies can assist with these tasks. Companies like Week2Week Serviced Apartments offer comprehensive management services, from promoting your property to handling bookings and guest communications. While this comes at a cost, it can significantly enhance your property's occupancy rate and overall profitability.


Is Serviced Accommodation the Right Property Investment Solution for You?


Investing in serviced accommodation can be highly rewarding, but it's not for everyone. It requires a higher level of involvement compared to traditional rentals and comes with its own set of risks. The key to success is thorough research and professional advice.


At Clarice Carr & Co., we specialise in helping investors navigate the property market in Newcastle and the North East. Our expertise can guide you in assessing whether serviced accommodation is the right property investment solution for your portfolio. We'll help you understand the local market dynamics, financial implications, and management requirements.


Serviced Accommodation: Property Investment Solution


Serviced accommodation in Newcastle and the North East offers a promising property investment solution with the potential for excellent returns. However, it's a more complex and involved investment compared to traditional buy-to-let properties. If you're considering this type of investment, it's crucial to seek professional advice to ensure it aligns with your investment goals and risk tolerance.


For personal guidance on investing in serviced accommodation, contact Clarice Carr & Co. today. Our team is ready to assist you in making informed decisions and optimising your property investment strategy.


Want to know more? Check out our website or get in touch.

 

Frequently Asked Questions

What is a serviced accommodation property investment solution?

How do I finance a serviced accommodation property investment?

What are the benefits of investing in serviced accommodation in Newcastle and the North East?

What are the challenges of managing a serviced accommodation property investment?

Is serviced accommodation the right property investment solution for me?


Comments


bottom of page