What are the costs associated with serviced accommodation investment?
There are several costs associated with serviced accommodation investment that should be taken into consideration when evaluating the potential profitability of an investment. Here are some common costs to consider:
- Property acquisition costs: This includes the purchase price of the property, legal fees, and any financing costs such as mortgage fees or loan interest.
- Renovation and furnishing costs: Depending on the condition of the property and your desired level of finish, you may need to invest in renovation or refurbishment works to make the property suitable for serviced accommodation. You will also need to furnish the property with appropriate furniture, bedding, and amenities.
- Operating costs: Operating costs include ongoing expenses such as property management fees, utilities, insurance, marketing costs, maintenance, and repairs.
- Taxes: There may be taxes or fees associated with operating a serviced accommodation property. You should research these costs to ensure you are accounting for all taxes and fees in your budget.
- Legal and regulatory costs: Depending on the location, there may be legal and regulatory costs associated with operating a serviced accommodation property, such as obtaining the necessary licence.
- Property management fees: If you choose to hire a property management company to manage your serviced accommodation property, there will be management fees to consider.
It’s important to carefully evaluate all of these costs when considering an investment in serviced accommodation to ensure that the potential returns are worth the upfront and ongoing expenses. It’s also a good idea to work with experienced professionals, such as estate agents and property managers, to help you evaluate the costs and profitability of a serviced accommodation investment.