Investing in serviced apartments

idkwhattosay

I can't find anything on here or elsewhere on the internet. I was looking at properties yesterday and noticed "fully managed apartments" for sale. After searching online a bit it seems they're called serviced apartments and you need a commercial mortgage to purchase. You can't live in them yourself hence me opening a thread in this section as it's an investment.

Does anyone have any experience in investing in these? What are the maintenance costs (do you have to pay maintenance charge and council tax)? Can they be sold easily or are there any caveats?

dunstonh

In property price falls, apartments always fall the most.  They are typically the worst type of property investment and are usually aimed at inexperienced property investors who lack the ability to buy the right property and are ripe to be taken to the cleaners.

Experienced landlords tend to use limited companies nowadays to buy property (due to tax) and have to be a lot more picky than they were 10-15 years ago.    There is still money to be made in property but not for those without a clue of the things to look our for.

idkwhattosay

Thank you for the general overview of investing in properties.

Bigwheels1111

I sold up and got out of renting.

To much of a pain in the XXXX.

My friend asked about one of these type of deal.

Rent paid for 10 years etc.

I property was not built and the rent was double what the area would demand.

idkwhattosay

Bigwheels1111 said:

I sold up and got out of renting.

To much of a pain in the XXXX.

My friend asked about one of these type of deal.

Rent paid for 10 years etc.

I property was not built and the rent was double what the area would demand.

As I understand these are more like hotels than houses. I was wondering if it's worth putting some extra cash in one of these for a year or two rather than keeping it in a savings account, but if you have to manage guests yourself and the rent is set then that sounds like too much hassle.

jimjames

The ones I've seen advertised look more like scams than genuine investments so be very, very wary about ones advertised specifically as serviced accommodation. Most property is advertised for sale and it's down to the buyer to then decide what they want to do with it. Some of these scams are offering guaranteed returns for no effort from the buyer which is a red flag.

If you want to setup your own SA business that's fine but investing in one advertised elsewhere needs a lot of due diligence and proper legal advice.

If you want to invest in a hotel then buy shares in a hotel company. If this is an alternative to a savings account then it is completely unsuitable as it has capital at risk like any investment. 

Eyeful

Saving & Investing are two different things.

If you think you will need to use your money within the next 5 years, best put it in an NS&I, Bank or Building Society savings account that is covered by the FSCS up to £85k. With savings, you expect to get back at least what you put in.

If you Invest, you are putting your money at risk and you may get back less than what you put in.  This is  just be the usual investmen,t warning but it should not be ignored.

Why this sudden interest in "fully managed apartments/serviced apartments"?

Please don't tell me it was sparked by something on social media or a you tube influencer stating how this was the way to make a lot of money

Remember:- If it sounds to good to be true, that's because it is.

george4064

Just from reading the thread title, this sounds like a terrible idea in my opinion.

Albermarle

idkwhattosay said:

Bigwheels1111 said:

I sold up and got out of renting.

To much of a pain in the XXXX.

My friend asked about one of these type of deal.

Rent paid for 10 years etc.

I property was not built and the rent was double what the area would demand.

As I understand these are more like hotels than houses. I was wondering if it's worth putting some extra cash in one of these for a year or two rather than keeping it in a savings account, but if you have to manage guests yourself and the rent is set then that sounds like too much hassle.

I am not an expert but I understand they are a kind of half way house between hotels and airbnb.
They are popular with business people, who have to stay away for a few nights at a time, but they can also be used for leisure trips as well.
So a perfectly legit concept that works. However whether investing in it is a good idea, is another matter.....