A Guide to Starting a Service Accommodation Business

Service accommodations, also known as short-term rentals or serviced apartments, are a lucrative way to maximize your rental income. By converting your property into a short-term rental, you can earn significantly more than traditional long-term letting. In this guide, we’ll walk you through the process of setting up and managing a successful service accommodation business.

1. What is Service Accommodation?

Service accommodations are fully furnished properties available for short stays, catering to tourists, corporate clients, and temporary residents. Unlike traditional rentals, they offer amenities such as housekeeping, WiFi, and utilities included in the rent.

2. Steps to Start a Service Accommodation Business

a) Choose the Right Property

• Invest in a property in a high-demand location, such as city centers, tourist hotspots, or business districts.
• Consider properties near transport links, attractions, and corporate hubs to attract more guests.

b) Check Legal & Regulatory Requirements

• Verify whether your local council requires planning permission for short-term lets.
• Ensure compliance with fire and safety regulations (smoke alarms, CO2 detectors, emergency exits).
• Get a specialized short-term rental insurance policy to protect your investment.
• Register your property with the relevant authorities and comply with tax regulations.

c) Furnish & Equip the Property

• Provide high-quality, modern furniture to create a comfortable guest experience.
• Equip the property with essentials such as kitchenware, linens, toiletries, and high-speed WiFi.
• Consider additional amenities like Netflix, smart locks, and workspace setups to attract business travelers.

d) Set Up Competitive Pricing

• Research similar properties in your area and adjust pricing based on demand and seasonality.
• Use dynamic pricing tools to automatically update rates for maximum earnings.

e) List Your Property on Booking Platforms

• Advertise on Airbnb, Booking.com, Vrbo, and other vacation rental platforms.
• Write an engaging listing with high-quality photos and a detailed description of your property.
• Encourage guest reviews to improve visibility and attract more bookings.

f) Manage Guest Experience & Maintenance

• Offer seamless check-ins with smart locks or key safes.
• Maintain high standards of cleanliness with professional housekeeping services.
• Provide responsive customer support to enhance guest satisfaction and secure repeat bookings.

3. Benefits of Service Accommodation

Higher Rental Income

• Short-term stays often generate 2-3 times more revenue than long-term rentals.
• Seasonal pricing allows for flexible earnings throughout the year.

Flexibility for Property Owners

• You can block dates for personal use while still making a profit from rentals.
• Adjust pricing and availability based on market demand.

Reduced Risk Compared to Long-Term Tenants

• Frequent guest turnover reduces the chances of rental arrears.
• Regular property inspections ensure maintenance is up to date.

4. Common Challenges & How to Overcome Them

a) Managing Bookings & Guest Communications

• Use automation tools like Guesty, Hospitable, or Lodgify to handle reservations, messages, and calendar syncing.

b) Handling Property Maintenance

• Partner with a reliable cleaning and maintenance team for quick turnaround between stays.

c) Dealing with Regulation Changes

• Stay updated with local short-term rental laws and adjust your business strategy accordingly.

FAQs

1. How much does it cost to set up a service accommodation?

Costs vary depending on property location and furnishing needs, but expect to invest in quality furniture, professional photography, and platform listing fees.

2. Can I convert my existing rental property into a service accommodation?

Yes! However, check with your mortgage provider and local council regulations to ensure compliance.

3. Do I need to pay additional taxes for short-term rentals?

Service accommodations may qualify for Furnished Holiday Let (FHL) tax benefits, but always consult a tax professional to understand obligations.

4. Should I hire a property management company?

If you don’t want to handle bookings and guest management yourself, hiring a short-term rental management company can help streamline operations.

Final Thoughts

Starting a service accommodation business can be highly profitable with the right strategy. By selecting the right property, complying with legal requirements, and managing bookings efficiently, you can maximize your rental income.