Getting started as a serviced apartment host isn’t always easy, so we’ve spoken to some people in the SA business to get you off to the best start in your new venture. Here are some useful tips for a successful start to your serviced apartment business:
Don’t be cheap
When buying a place, don’t pick somewhere that needs work doing. You’ll spend £15,000 doing the place up and miss out on several months of bookings. Spend the £30,000 extra and you’ll have guests through your doors on day one. I learned this the hard way – when I bought my first two apartments I tried to keep costs down so I bought properties that were fine as long-term lets but needed work to reach the standard that would top market rates. Because I’m good with my hands and had friends to help, I thought I’d keep costs down and do the work myself. They took months to complete and one apartment missed the whole summer, as well as costing me £15,000 each to renovate before costing in my time. If I’d simply bought more expensive properties with a higher standard of finish I’d have saved myself three months of stress and earned three month’s more top income.
Dave Cordner – Director, Central Belfast Apartments
Start with systems
Be prepared for the work load that’s about to hit you and be sure you have systems in place before bringing a property to the market. In the early days I spent too much time sorting out systems while running my operation which affected how quickly my business could grow. It has only been in recent months that I have managed to get everything totally systematised – with the result that I’ve taken on five properties in two months and will have another six on within a couple of weeks.
Gordon Dutfield – Regional Director, Diamond Serviced Apartments
Have a rainy day fund
Moving from the relative safety of other forms of income to the promised stellar returns of serviced apartment hosting is an advanced strategy. While those returns may indeed be stellar, the effort required and the unpredictability of this relatively new model is not well understood. The hospitality industry is notoriously unpredictable so be prepared for peak seasons and low ones, quiet months with little income and high seasons with great cash flow (which may well coincide with when you were hoping to go on holiday too) … so my top tip is to maintain a rainy day fund, using those busy months to tuck away income for quieter months so you don’t have to subsidise your business if your marketing hits a dud note for a while. If you take a 12-month view, then SA is a fabulous opportunity but if you need a rock-steady income each month then think carefully before you are lured in by the promises of super-high occupancy year-round.
Jenny Fenton – Owner, Bicester Short Stays
Be clear – be ready – be ruthless
- When looking for deals, understand that the management or rent to rent model can be very attractive to landlords. But remember it’s your job to be sure they understand your offering.
- Network, get training and learn as much as possible from more experienced operators so you can avoid crippling errors.
- Don’t chase the rainbow. Don’t force a deal to stack up. If it doesn’t fall naturally into place – move on.
T J Atkinson – Owner, The Source London
Brief your cleaners
A key feature of serviced apartment facilities is cleanliness. In this relatively new industry, don’t think you can hire any old cleaner and expect them to know what they’re doing. Give them a checklist of actions to complete for every changeover and fine tune it as you go along. Above all, make sure they understand the dynamics of check ins/check outs. Finally, get feedback from them regularly as they are your eyes and ears in the field.
Luis Guarin – Director, Clean2Let