Increase your income with Serviced Accommodation

Overview

Serviced accommodation is the fastest-growing sector in the property market at the moment, but many ordinary buy-to-let investors are put off by the increased time and effort required to run a serviced accommodation business. The simple solution is to hire a serviced accommodation management company to handle this for you.

This is how it works:

You can expect a 50%+ increase in your buy-to-let income, which means that the average buy-to-let that earns £400 per month could easily earn £600+ per month!

Throughout your time working with the management service, your property will be kept in showroom condition. Many landlords are put off by wear and tear when considering Service Accommodation, but in reality, your property will effectively become a ‘self catering hotel,’ which means it must be kept to a very high standard to satisfy the executive clients the service accommodation management company is housing in there. This obviously depends on your management provider, and you must ensure that you find a provider you can trust, as well as one with experience and knowledge in this field.

To gain bookings, the operator adds your property to their portfolio and markets it to their existing clients.
As a management fee, the operator typically takes around 20% of the booking revenue.
The operator then pays for all marketing expenses, cleaning and laundry bills, and any maintenance costs. The remainder of the revenue is then paid to you as the investor.

Tax benefits

One of the most important secrets in property investing today is the tax advantages of working with a Serviced Accommodation management service.
If you bought a property in your own name and then had to pay section 24 tax on it, you are now exempt if you run the property as Service Accommodation.
You can also claim capital allowances on your tax return because the property is no longer an investment property and is now a furnished vacation rental.
This means you can deduct up to 35% of the purchase price and any renovation costs as tax-free income.

This does not have to be claimed all at once and can roll over into subsequent years until you have claimed all of your allowances.
In some cases, this means you can pay no tax on investment property income for up to 5 years.
Capital allowances also apply to all property developments, so if you build a house for £500,000, you can deduct £175,000 from your tax bill.

What are your thoughts on serviced accommodation management?
Is it something you would consider using in your property investment business?