With Serviced Accommodation set to double in the next year according to Savill’s,
“The Association of Serviced Apartment Providers (ASAP) and Savill’s have released the headline results for the sector from their Operator Sentiment Tracker Survey (November 2017), which confirm that the sector has delivered a strong performance in 2017 and expects to deliver an even better performance in 2018, in spite of the challenging economic environment.”
this presents an opportunity to earn more money through multiple revenue streams, systemise your business to free up your time, and the ability to outsource everything you don’t like doing within your business. Serviced accommodation can change lives! and it certainly has for our directors and Approved Property Group partners.
So why SA?
Serviced Accommodation provides a better cashflow in comparison to buy to let tenancies (BTL) and houses of multiple occupancy (HMO) as it is bringing in revenue every working day, rather than monthly like other property strategies. It’s like a heartbeat, with HMO and BTL you have one beat a month but with serviced accommodation the heart is beating everyday, bringing in cashflow.
Because SA is operating on a commercial basis there are certain tax breaks that you can get that you can’t with HMO’s & AST’s (assured shorthand tenancies), these include capital allowance, if you use C1 planning in some areas you can get rates relief for 1 commercial property per company.
The internet has enabled this business, it definitely wasn’t possible ten years ago!
With the technology of high speed broadband and mobile, and globalisation of OTA’s, due to the increase in ability for global travel. For example booking.com website/mobile app is in over 40 languages, they have over 1.4 million properties listed, in 12,038 destinations in 225 countries!
Serviced accommodation provides flexibility in that there is more than 1 property strategy option available.
A regular lease agreement, or rent to rent, where the rent is paid every month and then leased out as a serviced apartment, and you take the revenue.
A management agreement, between an SA operator and a landlord, where you undertake and manage their property for them, in return for a percentage of sales.
Franchise deals where you require a license to operate under someone else’s model, for example holiday inn, hilton
private ownership is also another option worth considering.
Our APPROVED 8 Step model for serviced accommodation success, gives you the tools and answers the questions you need to start your SA journey.
– What are your goals? What does success look like to you? – Setting goals are vitally important to achieving success. It’s good practise to think about your goals and review them on a regular basis.
How regularly do you review your goals? At Approved Property Group we review our goals weekly and quarterly on a more strategic level.
– Create a strategic roadmap, what is your journey? – Getting from A to B is never a straight line, its full of ups and downs and not always easy to navigate.
– Consider different types of property For example look at the difference in terms of space between these three types of property, a typical hotel room, studio apartment and 1 bed apartment.
Clients are demanding more and more for their money! SA is an ideal alternative offering just this
– Our 4 revenue strategies,
WISH rate – this should be THE BEST case scenario, taking into account other prices in the area in periods of high demand.
WANT rate – The want rate is the most likely price rate that you will probably advertise most of the time.
WALK rate – The walk rate is the worst case, in low demand periods, the lowest price.
Finally your WOW rate – Introduce your WOW/event rate when demand exceeds supply, which allows you to command a higher price point. For example, a great strategy, especially for busy city centres is when an event like a concert or sports fixture is being held, as soon as it’s announced take all your properties in the area off the market so you aren’t advertising your standard rate. Wait a few weeks, and let all the cheap prices for beds go and then that’s when you reintroduce your rooms into the market at your “WOW” event rate, due to the demand in the area.
– How are you going to set up the day to day running of your business? – Things to think about include: communications to guests, check ins, cleaning, linen, maintenance, disaster recovery, bill payments, customer service, health & safety etc…
Within Approved Property Group we have a 128 page operations manual, containing all of our Standard Operating Procedures, Which also aids the final step of the 8 step model.
– How do you want to market your business to appeal to as wide a customer base as possible? – Examples of what we use for Approved Serviced Apartments are:
- Content marketing
- Facebook ads targeting events
- Facebook competitions
- Video marketing
- Building custom audiences
- Search ads
- Display ads
- Remarketing ads
- Engagement ads
Direct Marketing using:
It’s all about DISTRIBUTION, DISTRIBUTION, DISTRIBUTION!
– assess what could be done better? what are you already doing well that can be improved? – By using tools such as Google analytics, Facebook insights, PMS reports these assessments can be made on a regular basis.
If you don’t measure it! How can you manage it?
– A model that can be replicated by Approved Serviced Apartments and our partners, and as many times as you wish. Our main focus is process and people, to be able to replicate our model, you must have the right process and people in place as well as documentation and systems!
How can serviced accommodation change your life as it it did us and provide you with a great cashflow business!?
We have examples of partners who have built up their serviced accommodation portfolio from the ground whilst still in another job, to eventually grow enough that they can quit their job, and serviced accommodation is now their primary source of income.
In month 1, one of our partners spent £3,150 on rent and £3,600 on furnishings for 3 apartments and the first months bookings came in at just under £16,000!!
What is the number in your head that will change your life? $$$$
In the new year we are launching our brand new online Serviced Accommodation Millionaire (SAM) programme with some VERY special bonuses. To register your interest and change your life for 2018 for our brand new Serviced Accommodation Millionaire program! CLICK HERE