The Rise of Rent to Serviced Accommodation


What is Rent to Serviced Accommodation? 


Rent to Serviced Accommodation (also known as R2SA) is the term for a short type holiday let of furnished property which is provided by a person renting the property from the owner. The property is rented from the owner (landlord) at the normal long-term market rent and then it is rented out on short-term rentals with platforms such as Airbnb. The purpose of doing this is to generate more rental income through short lets rather than long-term rent. The short-term rentals with Airbnb have a much higher quality and presentation than a standard tenanted property as it has to appeal to short-term renters (sometimes as short as 2 days) who expect a high level of presentation, as they might get in a hotel or bed & breakfast. While a lot of the short-term lets might be for people taking a short break in that city there are many other reasons for short-term lets such as corporate stays or short-term seasonal accommodation (i.e. workers near a Christmas factory). 


Serviced Accommodation offers the facilities of a fully furnished house which renters can use turning up with a suitcase only, very much like going on holiday. Although there are some room-only serviced accommodation, most serviced accommodation is the whole property which will include a kitchen, bedrooms, bathroom and lounge. Like with a holiday rental all other bills such as utility and internet are included in the rent. This allows renters a feeling of convenience and home-like privacy so that they can enjoy their short stay when working, on holiday or visiting friends. 


With serviced accommodation being one of the fastest growing sectors in the property market, if done correctly, it can provide a great cash flow for both landlords and R2SA Operators.


Why does R2SA benefit landlords? 


With a traditional buy-to-let property having assured shorthold tenancies (AST’s) of around 6 months to two years, there can often be void periods where there is no tenant in the property. This can cause landlords to lose income and profit on the property during the empty period. R2SA has a management agreement (if the owner has a mortgage) or a lease (if the owner has purchased the property for cash) with a contract of 3,4 or 5 years. This is instead of a regular long-term tenancy agreement called an AST (assured shorthold tenancy agreement). This means that landlords don’t lose any income through void periods and can have a steady and reliable cash flow. 


Another benefit to landlords with an R2SA scheme is that properties are very well taken care of. Normally, within a rental property, there is often wear and tear, such as scuffs and marks which are frequently left unattended. However, with serviced accommodation, these are repaired regularly. This is because the better a property looks and feels, the better it is for the business that your tenant manages. This then lessens any maintenance costs over the years and keeps your property looking fresh and well-maintained. 


Rent to Serviced Accommodation is on the rise and is becoming extremely popular with landlords, and with assured rent for multiple years you can see why!


Why is the R2SA scheme attractive to property entrepreneurs?


The biggest benefit to property entrepreneurs is that you can make money out of an asset that you don’t own. This is also an easy way to get into the property market and gain a great profit margin along the way. Another benefit for R2SA operators is that they don’t have to  get a mortgage and put down a large deposit. Therefore, if done correctly, the rent to serviced accommodation route can be an extremely profitable investment, with relatively low setup costs. 


How do you make the Rent to Serviced Accommodation Scheme work for you?


First of all, it is very important to think of this business as a service business. The R2SA operator must offer excellent customer service and standards to get a high level of bookings at a good rate. In this way, the R2SA operator can generate the best profits. This is very different to managing a standard rental property. In serviced accommodation, if a washing machine breaks down you have hours rather than days to fix it before your reputation or feedback is affected. Happy guests create a profitable business.  


Arguably one of the most important things to get right with Airbnb/serviced accommodation is housekeeping. R2SA must find reliable and high-standard cleaners. The property has to be spotless and the linen/towels/consumables presented in a professional way. R2SA operators have to make sure they continually check the quality and have quality systems in place to ensure this. 


The first thing you want to do when you have your property is ensure that it looks the best that it can be. Therefore, we would recommend making an initial investment in the furniture and decoration of the property to make it desirable. You can do this by dressing up the property, which could include considering a feature wall, pictures, lamps etc… Think what you would do to the property if you wanted to stay there yourself. . If you are not used to doing this, we would suggest getting professional help.  


Another extremely important step is getting some good professional photos to boost your online profile (this is one of the best things that you can do for your property, so don’t overlook this step). By making your property look the best it can be, it will attract more customers. 


So how do you find tenants?


To attract short-stay tenants, you will need to advertise your property on online channels such as Airbnb, and/or There are other channels on offer, but these are the ones that we would recommend most. The benefit of the tenants being short-term is that you can charge at a much higher rate. Here at Property Fit, we think that you should be aiming for about a 60 – 70% occupation rate. Depending on your property, occupation rate and location, your profit should be anywhere from £500 up to one thousand pounds per month after all the bills!


We have already stated this point but as it is so important it is worth repeating: Once you have the tenants, customer service is extremely important! To keep up customer satisfaction, you need to ensure that, like a hotel room, sheets are changed in between customers and that your property is always clean and tidy. To do this, we recommend getting a good reliable cleaner to clean your property for you and make sure that the property is dressed properly, ensuring that the beds and towels are set out to perfection. 


Within the rent to serviced accommodation scheme, you need to make sure you are organised and have processes in place to communicate with past, present, and future tenants. To allow you to focus on the business aspect of this investment you might need help, and a good cost-effective way to do this is by using a virtual assistant. Virtual assistants are great for systemising your business and making sure everything is organised and runs smoothly. With them being quite low-cost from places such as Ukraine and the Philippines, we think that this is a very good idea!


Things to be aware of:


There are a few things to be aware of with rent to serviced accommodation. Here at Property Fit, we want to make you aware of these things and point you in the right direction. 


The first thing to be aware of, if you rent a leasehold property (which is typical with apartments) for R2SA, is that it is important to check the lease to see if it allows a short-term shorthold accommodation. Do not take on an R2SA property if the lease does not allow sub-letting. At Property Fit, most of our properties tend to be houses which are freehold and we will always make sure that if a property is leasehold that it allows short-term tenancies. 


Another thing is to make sure that you have the correct insurance in place. You need to have professional indemnity and Public Liability Insurance so that your property is covered in case an accident occurs. Even though Property Fit doesn’t provide insurance, we know the best insurers in the area and will recommend a good one for you. 


Here at Property Fit we are always open with our clients and will make sure that you are in the best set-up possible to start your R2SA journey! 


Important Contracts


As always, when leasing a house there are some important contracts that must be signed to legally rent out the property. There are two different types of contracts to allow for rent to serviced accommodation. 


One of the contracts is a Management Agreement which is used mainly with a mortgage. This allows you to take on the property from the owner and run the property for them on their behalf. The other is called a Commercial Lease, also known as a Full Repairing and Insuring Lease (FRI). This one is typically used without a mortgage and allows you to collect the rent from your own tenants and pay your monthly rent to the owner. 


Both contracts are effective in the R2SA process, but we will work alongside you to see which fits your needs better. If an R2SA operator uses the wrong contract and a problem occurs then it can be very hard to correct. A very common problem is that R2SA operators might use standard long-term tenancy agreements (AST). This will turn out to be a disaster if you need to move a tenant on but can’t as there are different rights. Do not rush the contract stage, attention to detail with contracts is crucial to creating a sustainable and profitable R2SA business.  


How can Property Fit help? 


We provide R2SA opportunities in Birmingham, Manchester, Liverpool, and Leeds! We are introducing 3-5 year contracts for R2SA Operators to sign which will include guaranteed rent to the owner of the property each month. 


Please note that we charge £3.5k + VAT for our Rent to Serviced Accommodation sourcing services.  Applicants will need to be referenced, and if buying through a company will need to be personally referenced as well. 


Once your application has been approved, we will offer you properties that may be suitable for R2SA. We will assess the viability of the R2SA units but it is essential that you also check the figures and make sure that a sensible budget and profit margin is likely. 


If you are interested in this scheme as either a landlord or a property entrepreneur, don’t hesitate to contact us today for more details. 


Call us today at (+44) 0333 358 0669 or email us at