FAQs
What is Rent to Serviced Accommodation?
Rent to Serviced Accommodation (Rent to SA) is a unique and innovative real estate investment strategy that has gained popularity in recent years due to its low investment requirements and high cashflow returns.
It involves renting a property from a landlord, often on a long-term lease, and then transforming it into a serviced accommodation unit to cater to short-term guests, tourists, or business travellers. AirBnB and Booking.com are platforms Serviced Accommodation Units are commonly advertised on.
What areas work well for this strategy?
Contrary to popular belief, tourist destinations are not the only location where Serviced Accommodation works well. In fact, the majority of people using Serviced Accommodation is actually business people and contractors. Therefore, any area with good transport links or an influx of people visiting the area to carry out construction or business HQs will work well for this strategy.
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It is likely there will be multiple areas within an hour radius of where you are based that would be perfect examples for this strategy!
Isn't this Subletting & Illeglal?
No, although commonly believed, this strategy is not illegal. Subletting is only illegal when performed on an AST contract (used for tenant's primary residence).
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This strategy involves renting through a company on a Company Let or a Rent to Rent Lease Agreement. In this instance, it is not illegal to rent a property and re rent it out on a short term basis.
Do you need planning permission or a lisence to run a Serviced Accommodation?
Generally in the UK you do not need a lisence or planning permission to use a C3 property (residential dwelling) for serviced accommodation. However this is not the case in certain places...
Greater London enforces a 90-day AirBnB rule whereby you cannot use a C3 property for more than 90 days in the year for short-term lets (under 28 days) without planning permission. Therefore remaining 9 months of the year will have to be used for stays over 28 days.
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Edinburgh have recently introduced the requirement for planning permission in order to use a C3 property for short term lets, unless a property has been managed in that way for more than 10 years.
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A license will be required for all businesses running short term accommodation in Scotland, however this is relatively straight forward to obtain.
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It is essential for investors to conduct thorough market research, understand local regulations to establish effective property management.
How much money do I need to start this business?
We recommend that you have £4-6k to initially invest into starting your business.
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This will cover the following costs:
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1 months rent deposit
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1 months rent upfront
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Furniture and light refurbishments
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It will cost upwards of £3k to furnish a property, however you can finance the majority of this over monthly payments so that the upfront cost isn't so big!
What are the requirements for joining the mentorship program?
The minimum age requirement is 18. However it is possible to join at the age of 16 alongside an adult.
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You must meet the investment criteria of £4-6k.
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