How To Get Started with Property Investing Powered by Hullocenty

1. Buy to Let: Long-term tenancy vs. serviced accommodation

Buy to Let is one of the most traditional and well-known real estate investment strategies. It involves purchasing a property with the intention of renting it out. However, within this strategy, you can choose between two different paths: long-term tenancy or serviced accommodation.

Buy to Let: Long-term tenancy

The long-term tenancy model is rather straight forward: you purchase a property, find tenants, and rent it out long-term. This strategy offers several advantages:

Stability: With long-term tenants, you benefit from a consistent rental income, reducing the risk of vacancy periods.

Ease of maintenance: Long-term tenancies generally require less frequent maintenance, as tenants are more settled and likely to take care of the property.

Set income: You can predict your income with greater accuracy, making financial planning easier.

However, this strategy is not without its downsides. The rigid nature of long-term leases can be challenging if mortgage rates increase, potentially turning your investment into a loss-making venture.

Buy to Let: Serviced accommodation

Alternatively, you might opt to rent your property as serviced accommodation. This could involve renting out the property on platforms, where short-term rentals are the norm. The benefits of this approach include:

Flexibility: You can adjust pricing and availability based on market demand.

Potentially higher income: With the right property and location, short-term rentals can generate more income than traditional long-term leases.

High Standards: Properties used for serviced accommodation are frequently cleaned and maintained, often to a higher standard than those under long-term tenancies.

On the flip side, income from serviced accommodation is not guaranteed, as it depends heavily on occupancy rates. Frequent guest changeovers can also lead to higher maintenance costs and more work overall. Additionally, it's crucial to ensure your mortgage allows you to rent the property as serviced accommodation; otherwise, you could face legal complications.