If you’re looking for an alternative property investment, then serviced apartments might be a good choice.
With over a million units now available in more than 13,000 locations, they’re an increasingly popular option for business travellers, a growing market worth tapping into.
What Are Serviced Apartments?
The idea behind serviced apartments is a simple one.
Somewhere between a hotel and a short-term apartment rental, they provide a fully furnished, comfortable place to stay, with the addition of housekeeping and other hotel-style conveniences.
The cost of rental includes bills and taxes, removing hidden costs and complications.
Serviced apartments provide more space and amenities than hotel rooms.
The living and sleeping areas are larger than in most hotel rooms, and they come with fully equipped kitchens.
Travellers have the convenience of home living while staying away.
Why Are Serviced Apartments Popular?
A survey last year by the Business Travel Show revealed that the use of serviced apartments is on the rise. So why are they so popular?
Some of the benefits are obvious from looking at these apartments. For a business traveller, serviced apartments offer better living space and more privacy.
An apartment provides travellers with comfort and convenience, instead of being constrained to a hotel room.
This brings with it greater flexibility. A guest in a serviced apartment can live like a local, experiencing the area as if they lived there.
This is particularly useful for executives who want temporary accommodation while they look for a permanent home.
They can get a feel for what a city is like and how it would be to live there while having the security of an ongoing base of operations.
Self-catering is one of the big draws for these apartments. It’s both more convenient and less expensive than the constant eating out that usually accompanies business travel.
Cost savings are one of the reasons why serviced apartments are so popular with accommodation buyers as well as travellers themselves.
For companies sending staff away for longer periods of time, such apartments cut costs and provide better value for money than hotel rooms.
They also maintain quality and convenience.
There’s also a demographic factor.
Younger executives are used to convenience and flexibility. Serviced apartments let them maintain a lifestyle they’re accustomed to.
Why Invest in Serviced Apartments?
Serviced apartments have several advantages as an investment.
On the most basic level, they’re property.
Generally speaking, property is one of the safest investments you can make.
Supply is constrained while demand keeps growing with the population. As long as it’s properly maintained, most property will accrue value just by existing.
Further value can be added by making improvements so that you have something better to sell on at the end.
Property also provides a steady stream of income, in the form of rent.
It’s an investment that pays off both on an ongoing basis and at the end. As long as you can find tenants, a serviced apartment will more than pay for itself.
Serviced apartments have become a particularly valuable form of property investment thanks to the growth in business travel. This ensures a steady stream of tenants, bolstering income for landlords.
The quality of these tenants makes life easy.
A Good Long-term Bet
Many landlords of conventional houses and apartments face trouble with tenants, whether they’re paying their bills late, damaging the property, or annoying the neighbours.
Business travellers are far less likely to cause such problems. This is partly because of the sort of people they are and partly because they’re there as representatives of their employers.
If you do have problems, then you can go to the company paying for the accommodation and ask them to talk to their employee, removing much of the burden from you.
The result is an apartment that’s likely to be kept in good condition.
And because housekeeping staff are going in regularly to clean, you can find out about any issues early on.
This allows you to fix them before the problem, and the cost of repairing, it grows.
As with any investment, there are risks to serviced apartments.
With the recent growth, the market may hit a glut at some point.
And because business travel is less essential than personal housing, they may be vulnerable to an economic downturn.
But with the economy booming and demand for these apartments still rising, now looks like a good time to invest.