Could short-term lets earn you more than a long-term tenancy? We compare the returns and risks of serviced accommodation against traditional buy-to-let.
The rise of platforms like Airbnb and Booking.com has opened up serviced accommodation as a mainstream income strategy for UK landlords. But is it actually more profitable than traditional buy-to-let, and what are the risks?
Income comparison
A typical two-bedroom flat in Essex or Surrey might achieve £1,100-£1,400 per month on a long-term let. The same flat managed as serviced accommodation might achieve £80-£150 per night — potentially £2,000-£4,000 per month if occupancy is strong.
However, the headline nightly rate doesn't tell the whole story. Serviced accommodation comes with higher operating costs: professional cleaning after each stay, laundry, platform fees (typically 15-20% of revenue), consumables and significantly higher maintenance costs due to higher usage.
Occupancy rates matter enormously
The profitability of serviced accommodation is highly sensitive to occupancy rates. An average rate of 70% (21 nights per month) is required to match or beat many long-term lets after costs are factored in. Achieving consistently high occupancy requires active management, good reviews, dynamic pricing and effective marketing across multiple platforms.
Location is critical
Serviced accommodation works best in locations with strong short-term demand: near major employers, hospitals and research parks for corporate guests; near tourist attractions and transport hubs for leisure guests; in commuter towns for contractors and project workers. Not every property in every location will generate strong serviced accommodation income.
Regulatory considerations
In London, short-term lets are restricted to 90 days per year without planning permission. Outside London, restrictions vary by local authority and are becoming more common as councils seek to manage housing supply.
Our recommendation
For many landlords, a hybrid approach makes sense: running serviced accommodation for high-demand periods and falling back on longer-term lets during quieter periods. Our serviced accommodation management service maximises your income across all channels while handling every operational aspect. Speak to us about whether your property is well-suited to the serviced accommodation model.