Rent to service accommodation investment advice?

Rent to service accommodation investment advice?

10:37 AM, 20th May 2022, About 2 years ago 2

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Hi all, Some companies do rent to service accommodation and I am looking for advice on this market, please.

This type of contract is where you lease an apartment from them for say 3 to 5 years and you then use the apartment for short lets. Part of the deal is that the apartment is fully managed.

My questions are:

Is this a good scheme for investors or is the risk/reward ratio better in more traditional BTL?

And more specifically are there any serious pitfalls that I should be aware to look out for or take into account?

I look forward to any help or experienced feedback.

Many thanks


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Dylan Morris

15:22 PM, 21st May 2022, About 2 years ago

If an apartment chances are it will be leasehold tenure. You need to ensure the lease allows firstly that you can let the property out. Permission from the freeholder might be needed, sometimes not. Then check that the lease allows short term lets (specifically serviced accommodation lets that type of thing). Many leases only allow long term lets on an AST basis for a single household. I have 4 rental apartments and none of the leases allow short term serviced apartments/holiday lets. My advice check the lease before doing anything.


16:55 PM, 21st May 2022, About 2 years ago

I've read quite a few stories of people Trying to get out of similar deals where the management costs escalated and they lost money.

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