Before considering what incentives there are for landlords to convert their apartments for the serviced market, it is certainly important to consider the different types or categories of serviced apartments:
Aparthotels
Typically have: -24 hour reception -hotel style facilities such as a bar and/or restaurant -more frequent maid service -operate reservations like a hotel
Dedicated serviced apartment building
Typically have: -a concierge available during office hours or longer -out-of-hours meet greet service or self check-in -an emergency phone number
Individual serviced apartments in a residential setting operated by a specialist servived apartment provider
Typically have: -no on-site staff -meet greet service or self check-in -an emergency phone number
Individual serviced apartments in a residential setting operated by a private landlord
Typically have: -no on-site staff -meet greet service or self check-in -no emergency phone number and office hours assistance only
At SilverDoor Apartments, we have always been clear about definitions and the minimum requirements for a serviced apartment. In all cases, a serviced apartment is a residential apartment, let or rented out on a nightly basis in generally the same way as a hotel room. A serviced apartment is fully furnished, has a fully functioning and equipped kitchen, or as a minimum a kitchenette, and most importantly is serviced. Service levels must, as a minimum, mean being fully cleaned with a change of all linen and towels at least once per week. A serviced apartment must include all bills and costs (except outgoing phone calls). There are still some operators who charge separately for broadband, but the vast majority include this in the nightly rate.
The higher nightly rates really appeal to landlords. They must consider the higher costs of maintenance, all utility, broadband and satellite TV bills, and the maid service. The other major consideration must be percentage occupancy levels, although given the shortage of supply of serviced apartments in most areas of the UK, this shouldn't be regarded as an obstacle. Another key advantage of the medium-to-longer-stay of the serviced apartment sector is that it is almost exclusively corporate, which is very attractive to most landlords in terms of yield, security, and fewer maintenance problems. After all, if a corporate tenant causes damage to a serviced apartment, he or she is likely to face severe consequences from his or her employer and so such incidences are rare!
Further benefits to landlords running serviced apartments for corporate clients include:
-No need for tenancy agreements -Reservations are for a set period - landlords often have difficulties getting rid of troublesome AST tenants -Not vacant for long periods - if there's a downturn, flats can lay empty for months. If they properly develop their sales channels, serviced apartments should rarely be vacant -Standard AST rentals are usually just featured with one agent - serviced apartments can be featured by multiple agents so landlords could easily have over 100 sales people effectively working for them if they sign up with the key agents -Free advertising via SilverDoor and other agent websites
