In this module, we’re going to be talking about what properties work for short term lets and serviced accommodation. In the main, any type of property works and any type of location works. As I’ve expanded my business across multiple cities within the UK, and also internationally into different countries, I’m starting to find out that, mainly, everything works for serviced accommodation, which is great news for everyone. However, in the main, and I often get asked this question, what would you only invest in if you could only invest in one single type of property?
The answer to that is I wouldn’t really because I think you need a diverse strategy if you’re going to build an empire of short term lets and serviced accommodation units, which hopefully you are. So let’s just look at what we’ve got. We have houses in the Maine and houses work very well. I would say three beds plus, however, I have got some two beds that do also work. Again, it all really comes down to the debt cost. Okay? What I mean by that is either the mortgage plus the bills and the turnover costs or the rent plus the bills and the turnover cost because I can have a one-bed house that does 1500 pounds a month, and my debt cost on that might be 500 pounds, and ultimately, I’m making a thousand, whereas I could have a six-bed, it might make three grand a month, but my debt cost might be two and a half grand.
So it might only make 500 quid. So it’s not always about the size of the property or the type of the property. For me, it’s about the profit and this is where you have to invest with logic rather than emotion, and that’s quite difficult at the beginning of your journey because you’re excited. You want to get going, and you’ll more than likely take on properties that you shouldn’t. I’ve learned from that mistake. Please don’t do the same. Make sure to read the Basics of Serviced Accommodation if you need to understand this better.
So in the Maine, we have houses that work very well. We have blocks of flats that, again, work very well, the thing with blocks of flats are you need to be very, very, very clued up on the leases and you want to make sure that you’re not going to get caught out.
That’s one thing top tip. Make sure you read the leases. Make sure that you can run short term rentals within the block. Blocks of flats work incredibly well if they do because you get economies of scale. So you can actually leverage the fact you’re in one place, your cleaners aren’t having to travel all over the place. You’re not having to pay fuel bills. You can have everything stored in one place in terms of your line, et cetera, and you get economies of scale on the booking sites as well. There are some clever tactics that we can do on the booking sites, which actually drive more eyeballs or blocks of flats than it does for one single location.
Then we move to different destinations, different countries. I don’t know how to draw a Villa, but you have nice villas, and they do incredibly well in the holiday destinations and you can then wrap other services in there. I’m currently looking at a service. We’re going to offer luxury by Luke Stays where we’re basically going to start bolting on a lot more than just check-in and check-out ourselves. We’re going to start bolting on chefs in stay, arranging all your experiences, and Mercedes vans pickups at the airport, and just really given that million-dollar experience to the guests, but in order to do that, we need much more luxury properties to be able to pull that off.
We also need more customer service on the front-end as well. So that’s where you can potentially expand too if obviously, you want to, or you can just stick to the norm of kind of houses and flats across the UK, different types of houses, terraced houses, semi-detached, detached. Doesn’t really matter. As long as the debt cost works, as I explained before, for the nightly rates and we’ll cover that in the deal analysis video later on in the series on how you actually work out, whether the deal is viable or not, which is super important. We’ve got to invest with logic and not emotion.
I cannot stress that enough. Again, thanks for reading this module, and if you come back, we’re going to be showing you my journey. I’m going to be pacing it out so you can see all the little intricacies of how I built the portfolio up and give you some great insight into what you can do and how your journey might also play out. So don’t forget to subscribe, and more importantly, don’t forget to continue reading this Free Property Learning Course over the next 30 modules to make sure that you can also become a short term rental and serviced accommodation expert.