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Serviced Accommodation & Short-Term Lets: Flexible Rentals, Higher Profits

Short-term lets can generate strong returns—if managed correctly. Discover how to make serviced accommodation work for you.

David AdamsPublished Last updated Editorial direction by Jamie Adams and David Adams

Originally published on Property Business Insights on 26 March 2025. Retained from our archive; figures and rules quoted were current at the time of writing.

Serviced Accommodation & Short-Term Lets: Flexible Rentals, Higher Profits

Serviced accommodation (SA) and short-term lets are among the fastest-growing property strategies in the UK. Powered by platforms like Airbnb and Booking.com, this model allows landlords and investors to rent out properties on a nightly or weekly basis, much like a hotel — but often with the comfort and character of a home.

This strategy can offer significantly higher returns than traditional buy-to-let, especially in high-demand areas. However, it comes with its own set of challenges, including higher management requirements, seasonality, and regulatory scrutiny.

What is Serviced Accommodation?

Serviced accommodation involves renting a fully furnished property to guests for short stays. This could be:

  • A single apartment rented to tourists or business travellers
  • A large house rented out for group getaways
  • A spare room listed on Airbnb

Guests typically expect hotel-like standards: fast WiFi, fresh linen, toiletries, and self-check-in systems. You can self-manage, hire a co-host, or outsource to a short-term let management company.

Why Investors Choose This Strategy

The major appeal of SA is income potential. When compared to traditional renting, nightly rates can be several times higher — especially in peak seasons or areas with limited hotel supply.

A Quick Example

Let’s say:

  • A standard rental might bring in £1,000/month
  • With SA, you charge £100/night
  • Even at 60% occupancy (18 nights/month), that’s £1,800/month gross

In high-demand cities or during peak travel months, many investors easily exceed these figures — though success depends heavily on location, presentation, and management.

Key Benefits of Serviced Accommodation

Higher Revenue Potential

You’re not tied to long-term rents. With good occupancy and pricing, your monthly income can far exceed that of a buy-to-let.

Flexibility of Use

You can block off dates for personal use or adapt your strategy as demand changes. Some landlords convert to short-term lets during busy seasons and revert to longer-term tenants in the off-season.

Less Wear and Tear (Surprisingly)

Short stays mean less chance of long-term damage. Guests rarely cook, and most stays last just a few nights. With regular cleaning and inspections, issues can be spotted early.

Tax Advantages

Serviced accommodation that qualifies as a Furnished Holiday Let (FHL) can benefit from capital allowances and other tax perks unavailable to traditional buy-to-let landlords.

Challenges and Considerations

High Management Demand

Turnovers can be frequent — sometimes multiple times a week. Cleaning, laundry, restocking supplies, and communication with guests all need to be streamlined or outsourced.

Seasonality

Income can fluctuate. Coastal towns, tourist hotspots, or event-based locations can earn heavily during certain months and struggle in others. Your cash flow must absorb quiet periods.

Local Regulations

Many councils now have restrictions on short-term lets, especially in cities like London, Manchester, Edinburgh, and York. In London, for example, properties can only be let out for a maximum of 90 nights per calendar year without planning permission.

Always check planning rules, licensing requirements, and leasehold terms (if applicable) before committing to this strategy.

Platform Fees and Competition

Booking platforms take a percentage (typically 15–20%), and there is competition from other hosts. Your photos, reviews, pricing, and guest experience must stand out.

What Makes a Good SA Property?

  • Prime Location: City centres, near airports, tourist attractions, hospitals, or transport hubs
  • High Footfall: Areas with consistent demand from tourists, business travellers, contractors, or families
  • Appealing Design: Well-furnished, modern, and Instagram-friendly interiors tend to perform better
  • Parking or Access: Off-street parking, key safes, and flexible check-in improve guest experience
  • Multiple Bedroom Options: Larger properties that can host groups often generate more per night

Pricing & Occupancy Strategy

A successful SA property depends on balancing price with occupancy. You might not fill every night, but pricing dynamically (higher on weekends, events, or holidays) can drive up total monthly revenue.

Use tools like:

  • AirDNA: To research demand and average nightly rates
  • PriceLabs / Beyond Pricing: For dynamic, algorithm-driven pricing
  • Channel managers: To sync bookings across platforms and prevent double-bookings

Who is Serviced Accommodation Best For?

This strategy works well for:

  • Investors seeking high monthly returns
  • Those with time (or systems) to manage bookings, turnovers, and guests
  • Landlords in prime urban, coastal, or tourist locations
  • Operators looking to scale a branded portfolio or systemised management business

It’s not ideal for those who want a “set and forget” model — unless you fully outsource to a specialist management company, which will reduce your profits but save you time.

Final Thoughts

Serviced accommodation is one of the most profitable property strategies, but also one of the most demanding. Success comes from attention to detail, systems, customer service, and understanding your market.

If you get the formula right — strong location, great presentation, professional operations — this strategy can deliver income that far exceeds a traditional rental, with the added bonus of flexibility and lifestyle.