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Get The Most Profit From Your Serviced Accommodation Units · The Property Unleashed Podcast

• 0:00
  Speaker 1: How to make the most from serviced accommodation.
• 0:02
  Speaker 1: Hello, my name's Mark Fitzgerald.
• 0:15
  Speaker 1: It's great to have you joining me here today.
• 0:17
  Speaker 1: So in today's episode we're going to cover how you can get the most out of the serviced accommodation strategy.
• 0:23
  Speaker 1: If you're looking at doing it with accommodation strategy, if you're looking at doing it with your existing properties or you're looking at buying properties as well, this is a great strategy to be using right now to get high cash flowing income coming from your properties.
• 0:37
  Speaker 1: And, of course, you can look to do rent to rent SA as well Rent to SA with other people's properties.
• 0:44
  Speaker 1: So let's get into it, shall we?
• 0:46
  Speaker 1: So a lot of people out there at the moment are a little bit afraid of serviced accommodation.
• 0:51
  Speaker 1: Here at the beginning of 2024, the government have come out and they have said that there are going to be legislation changes and there's going to be all sorts of rules and regulations coming in.
• 1:01
  Speaker 1: Now for me personally, I think that's a good thing.
• 1:03
  Speaker 1: I think it's been a little bit like the Wild West out there when it comes to serviced accommodation, and by putting in potentially some licensing, by putting in something that really means that you've got to be at a set standard, is good for any sort of sector or industry, and, of course, serviced accommodation needs this as well.
• 1:22
  Speaker 1: I do think that you should have a bit of a stamp of approval.
• 1:26
  Speaker 1: If you've got everything in place and it's been checked, you should be able to offer that in your advertising if you're on Airbnb or Bookingcom, and hopefully something like that will come in.
• 1:35
  Speaker 1: But who knows?
• 1:36
  Speaker 1: Now, serviced accommodation can go by many different names Airbnb, bookingcom, holiday Letts, shortterm rentals you name it.
• 1:46
  Speaker 1: When I was a kid, it used to be called holiday lets.
• 1:49
  Speaker 1: If you went away somewhere and you stayed in a property that wasn't a hotel, it was called a furnished holiday let.
• 1:55
  Speaker 1: That is still a terminology that can be used.
• 1:57
  Speaker 1: Fundamentally, though, they all mean the same thing they are not a permanent residence for anybody.
• 2:04
  Speaker 1: So what do I mean by that?
• 2:05
  Speaker 1: Well, we do not use AST contracts with serviced accommodation companies, units.
• 2:11
  Speaker 1: You use licensed agreements, and somebody has somewhere else to live, so they are just using it for a short time.
• 2:20
  Speaker 1: Now there's lots of different sectors that you can look at catering for, or niche markets, should I say, in serviced accommodation, you have the contractors market.
• 2:28
  Speaker 1: You have large properties.
• 2:30
  Speaker 1: You can do groups, group bookings, family getaways.
• 2:33
  Speaker 1: You can, of course, do the tourist trade.
• 2:35
  Speaker 1: Depending on where you are in the country, you can look at housing, government officials, maybe police, maybe doctors.
• 2:44
  Speaker 1: If you're close to hospitals and sort of networks like that, that can work really, really well.
• 2:48
  Speaker 1: Or you can just cater for families.
• 2:50
  Speaker 1: You know big houses, comfortable living that families would want to take on.
• 2:55
  Speaker 1: Now, people may want to stay in a short term rental accommodation for a number of reasons, and they can be.
• 3:02
  Speaker 1: One is they just want to visit the area and they want a home from home.
• 3:06
  Speaker 1: Two is they want to visit other people.
• 3:07
  Speaker 1: Three is they're going for an attraction.
• 3:09
  Speaker 1: Maybe there's something in the area that they want.
• 3:11
  Speaker 1: They could be working in the area as well.
• 3:14
  Speaker 1: And, of course, you could just be moving into a new area looking for a place to either buy or rent long term.
• 3:21
  Speaker 1: You can stay in a short-term rental whilst you're looking at finding something else.
• 3:26
  Speaker 1: So the reason serviced accommodation, short-term rentals, is so popular out there at the moment is they offer, when done correctly, great cash flow.
• 3:34
  Speaker 1: You can really maximise your profits from a property that you are operating as a short-term rental over, say, a buy-to-let.
• 3:42
  Speaker 1: Now, a buy-to-let does have its place, but with the interest rates going up the way they are, it's fine.
• 3:47
  Speaker 1: Well, investors are finding it more and more difficult to actually be able to make a living from buy-to let without having to dip into their own pocket and actually pay for the properties themselves, and that is not a good strategy.
• 4:00
  Speaker 1: That is not a good strategy for a savvy investor like your good self.
• 4:04
  Speaker 1: But if you are looking at getting involved or starting up a serviced accommodation business and I would say very much, look at it as a business.
• 4:12
  Speaker 1: There are some great tax efficiencies that you can get from serviced accommodation as well.
• 4:17
  Speaker 1: You can claim capital allowances on the properties that you've got.
• 4:22
  Speaker 1: Equally to that, if you are a buy-to-let operator, an old school landlord who maybe has the properties in your own name, chances are section 24 has hit you pretty hard.
• 4:34
  Speaker 1: Section 24, which was introduced in 2017 and has been in full flow ever since and is now into full flow means that you cannot claim back the mortgage payments as an expendable cost in your business.
• 4:48
  Speaker 1: So all of a sudden, that has put a lot of landlords up into the higher rate tax bracket.
• 4:53
  Speaker 1: Now, if you do serviced accommodation, hmrc look at each serviced accommodation as an individual business, in which case then it's taxed as a business.
• 5:02
  Speaker 1: It's not off of your own personal tax or income coming through.
• 5:06
  Speaker 1: So it can make a lot of sense to be converting your properties into serviced accommodation units or, of course, going out there and helping landlords by operating a rent to SA unit service.
• 5:20
  Speaker 1: There are a few things that you need to look at when getting involved in serviced accommodation.
• 5:23
  Speaker 1: One of those is mortgage restrictions.
• 5:25
  Speaker 1: So if you are looking at turning an existing property into a serviced accommodation, then you need to check with your mortgage provider, if you have one, that you are allowed to operate it as a short-term rental.
• 5:37
  Speaker 1: Never be afraid to ask.
• 5:38
  Speaker 1: Chances are it probably won't be, but they may give you permission to do so or they may give you the option if maybe your mortgage is coming up for renewal and you know obviously you don't want to lock it in for a new fixed rate at a buy to let.
• 5:55
  Speaker 1: You can see if they have a serviced accommodation short-term rental package that they can offer you.
• 6:00
  Speaker 1: The flip side to that is as well.
• 6:02
  Speaker 1: Speak to some independent mortgage brokers, not the high street banks, not the estate agents that potentially have their own mortgage broker.
• 6:10
  Speaker 1: Go and find independent mortgage brokers If you need any help with that, reach out to us and we'll recommend a few that you can go and speak to.
• 6:17
  Speaker 1: No obligations, no strings attached.
• 6:19
  Speaker 1: They are just independent mortgage brokers.
• 6:21
  Speaker 1: Why?
• 6:22
  Speaker 1: Because they have the whole market to be able to go out there and find you the best brokers and the best packages to suit your needs.
• 6:29
  Speaker 1: If you go to the banks or you go to estate agents, they normally only have a small niche that they actually work in.
• 6:36
  Speaker 1: You want an independent mortgage broker to be able to help you get your best rates.
• 6:41
  Speaker 1: Another thing is, if it's a leasehold property a flat or something like that you need to be checking if there's any restrictions on the lease that you can operate it as a serviced accommodation, because if there are and you set it up, you'll be asked to stop operating it and of course, we don't want to be in there wasting our money, do we?
• 6:58
  Speaker 1: So those are just a few things that you want to be looking out for as you get into serviced accommodation, as you're looking to set things up there.
• 7:05
  Speaker 1: It is a great, great strategy to be getting into and if you need any help and support with that, then here we offer you plenty of those things.
• 7:13
  Speaker 1: So do check out thepropertyunleashedcom for free tools and resources, free e-books, serviced accommodation training.
• 7:22
  Speaker 1: We have, which is 100% free, as well as a serviced accommodation guide.
• 7:25
  Speaker 1: If you visit thepropertyunleashedcom, you can download those for yourself and see if serviced accommodation is right for you or if you're already operating a serviced accommodation.
• 7:36
  Speaker 1: I'm sure some of the tools and free resources we have will help you on your serviced accommodation journey.
• 7:42
  Speaker 1: So that leaves me to say that serviced accommodation is a great strategy still to be getting into.
• 7:49
  Speaker 1: It's a golden time right here, right now, to be getting into serviced accommodation.
• 7:53
  Speaker 1: Why?
• 7:53
  Speaker 1: Because when the legislation comes in, if you're already set up, chances are you'll get what is called grandfather rights to be able to take properties that are already set up, that are already compliant, and just move them into whatever licensing or restrictions that they bring in place.
• 8:08
  Speaker 1: It could be harder to get into this once they've got them all in place.
• 8:12
  Speaker 1: It won't be impossible, as nothing is impossible at the end of the day.
• 8:15
  Speaker 1: So stay connected, stay subscribed to this channel and we will keep you updated as and when things start to change and things start to happen in the property industry.
• 8:27
  Speaker 1: You take care and bye for now.