Higher rental yields 

Shorter-lets command higher yields (generally a third more), and if you buy quality apartments in areas of high demand investors can capitalise on these high-yields even more by charging premium rates. 

Flexibility 

Serviced apartments afford investors greater flexibility, depending on the requirements of your cashflow. You can choose to rent them on a longer-term basis for stability, if you prefer, or you can rent them out on a daily/weekly or monthly basis – or anything in between!  

Diversification 

Serviced apartments are a different asset class, so if you’re a traditional buy-to-let investor you may like to spread your risk by diversifying into another asset class.  

Location independence 

There are loads of locations you can invest in: tourism hot spots, CBDs, city centres – locational demand for serviced apartments is across the board. Just be sure to do your research on guest-demand and length of stays first. 

Tax benefits 

In the UK, if your investment meets the criteria for furnished holiday lettings (FHL) then you might quality for various tax advantages including, potentially, capital gains tax trader relief. 

Professionally managed hands-off investment 

Obviously, serviced accommodation requires slightly more management than traditional buy-to-lets due to the higher turnover of stays. The good news, however, is that there are hundreds of quality management companies so you don’t have to lift a finger. 

Higher Average Daily Rates/RevPAR 

RevPAR stands for Revenue Per Available Room – and due to the short-term nature of booking, serviced apartments command higher daily rates, feeding into your higher rental yield. 

Demand from corporate tenants 

Corporate and business tenants often prefer serviced apartments than hotels and you may find investing in locations with a strong business presence can lead to consistent demand for your apartment. 

Potential for appreciation 

If you buy in locations with strong growth potential, your asset may appreciate in value over time, providing capital appreciation in addition to a rental income stream. 

Hedge against economic downturns 

Because they’re in the hospitality sector rather than the mainstream property market serviced apartments may offer somewhat of a hedge against a stagnant or underperforming market. Business and leisure travellers will still require accommodation – and tourists will still book those trips! 

Easily scaled 

If you’re happy with your initial investment serviced apartments are very easy to scale in that you can acquire additional units, increasing your revenue stream. Also, they’re generally a lower price point than traditional buy-to-let means a lower capital outlay in the deposit needed to purchase the unit, tying up less of your cash.