Do you ever have questions about Serviced Accommodation?
This week I'd like to share a transcript with you of SOME of the Q and A from Monday’s webinar, The Buy To Let Survival Guide.
I think you’ll find the answers useful...
Q. Does Serviced Accommodation work in areas of high unemployment, and high crime?
A. You had me until the last one, high crime. But high unemployment areas can definitely work. We let many of our properties to tradespeople, who don't have a problem living in ex-local authority properties.
Also it depends what you mean by 'high crime'. In the context of the wider world, the UK is a low crime area on the whole. But apply your judgement.
Q. How do you classify rent-to-rent as commercial? Won't the landlord object, or is it simple to change back to C3?
A. Great question. One of the things you can do is apply for a temporary change of use for the duration of your rent to rent contract, so it switches back at the end.
Q. If many people do Serviced Accommodation, will the income come down?
A. Booking.com and AirBnB are saying their revenue will double over the next two years. And the biggest increase in demand for Serviced Accommodation will be in the UK, and France. So personally I’m not worried about increased competition. There’s never been a better time to carve out your own niche.
Q. I'm interested in Serviced Accommodation, but don't want it to be hands on. I'd like someone to look after the property for me. Is that an option?
A. Yes, we have a management service we offer to investors. Basically you get to use our systems and staff (rather than creating these systems yourself), for a cut of your revenue.
Many of our Mastermind students choose to do this, because it frees up more time for higher value work, such as finding new deals.
Q. Can Serviced Accommodation work overseas, e.g. Tenerife?
A. SA works all around the world, what matters most is your local knowledge of the area.
Q. I've no property as yet, can I use Serviced Accommodation as my first venture?
A. Absolutely, 100%. What many people forget is you only have to control a property, not necessarily own it. So the barriers to entry are in theory quite low - although you still need to know what you're doing!
Q. Do you need to obtain planning permission from the council to run Serviced Accommodation?
A. Sometimes. 60-70% of UK councils require notification, not a planning application.
Q. Is the average price you charge per night linked to an income ratio?
A. We'd first need to teach you how to do the research on prices and demand in an area. But it's not unusual to get between £70 and £100 per night, even outside London. Inside London will usually be more.
Q. I've got properties that are on standard buy to let mortgages. How is changing to Serviced Accommodation viewed by the lender?
A. With many lenders you just need their permission to let in a different way. In a worst-case scenario, you have to change the lender.
We can provide a complete list of lenders who would be very happy with Serviced Accommodation. Metro Bank, Lloyds, Leeds Building Society, Market Harborough Building Society, Bank of India... there are loads.
Q. If I were to acquire a new rent to rent property, what major differences would there be if I made it Serviced Accommodation?
A. Physical differences? Virtually none. The massive advantage of Serviced Accommodation is you don't need to reconfigure or rebuild property.
Q. Why wouldn’t people use hotels instead of Serviced Accommodation?
A. For me, I was a management consultant for many years. I would get a four or five month contract. In that situation you'd much rather live in a house or flat for four or five months, than a hotel room.
Houses and flats are also more friendly for families with children. Asking your kids to live out of a suitcase isn’t fun, or probably fair.
Q. How do you get commercial finance on a project when you have no track record?
A. You get it on bricks and mortar values. Or you bring people onto your board (directors, not shareholders) who do have experience.
For a number of months, I’ve been trying to work out how we can answer questions like this on an affordable basis. Currently this sort of support is only available to our Masterclass and Mastermind students.
If that’s beyond your budget right now, I still want to help you.
So let me ask…
For a nominal monthly fee, if you could get:
Would you be interested?
I’ll be announcing the details at our first ever Serviced Accommodation Conference and Awards, in Doncaster on Saturday 30th September.
If you’re involved in Serviced Accommodation (or would like to be), I’d love to shake your hand at the event. Plus you’ll have the chance to build connections with 200 other successful SA practitioners.
You can read more at www.touchstoneawards.co.uk. We only have space for 200 guests, so book your ticket now if you’d like to be involved.