Serviced Accommodation: A Complete Guide

There’s a lot of noise in the property investment world — trends that come and go, headlines about yield spikes in one city or exodus from another. But if there’s one model that’s quietly and consistently carved out a profitable niche in both urban centres and staycation hotspots, it’s serviced accommodation.

And no, this isn’t just code for a slightly nicer Airbnb. Done properly, serviced accommodation is a high-performing, flexible asset class with serious income potential — but only if you understand what it is, how it works, and who it’s actually for.

Let’s get into it.

What Is Serviced Accommodation?

At its simplest, serviced accommodation refers to fully furnished properties available for short stays, usually with hotel-style services included. That might mean weekly cleaning, linen changes, keyless entry, on-call support, and utilities baked into the nightly rate.

They’re not hotels, and they’re not traditional tenancies — they sit somewhere in between. Think of them as the hybrid child of buy-to-let and hospitality.

Serviced apartments can range from one-bed city flats to full townhouses in rural locations. What makes them serviced is the operational model, not the property type.

Why Has It Become So Popular?

A few reasons — and they’re all worth understanding if you’re weighing this model up against traditional long-term lettings.

First: flexibility. For guests, serviced accommodation offers more space, privacy, and convenience than a hotel — often for less money. For landlords, it unlocks higher per-night rates and the freedom to price dynamically based on demand.

Second: the rise of digital nomadism and hybrid travel. Post-2020, there’s been a massive uptick in people travelling for extended work stays, relocations, or university terms. Hotels aren’t designed for that. Serviced accommodation is.

And third? Let’s be blunt — yields.

In areas with strong tourism, business travel, or student overflow, the income potential often outpaces long-term tenancies, even after factoring in increased turnover and operating costs. The trade-off, of course, is more management — but with the right systems (or a good operator), that can be streamlined.

Serviced vs. Short-Term Letting: What’s the Difference?

It’s subtle — but important.

All serviced accommodation is short-term letting, but not all short-term lets are serviced.

The key distinction lies in guest experience. A serviced unit is marketed and run more like a hotel: clean, professionally managed, guest-ready at all times. A basic short-term let might be a property where the owner occasionally rents it out — no regular cleaning, inconsistent standards, and usually a more DIY approach.

Serviced accommodation operates at a higher standard — and, as a result, can command higher prices and appeal to corporate clients, insurance bookings, and international travellers. It’s also better positioned to capitalise on institutional contracts or long-stay guests (30+ nights), which tend to be more lucrative and less hassle.

Where Does It Work Best?

It’s not universal. Not every city or suburb is ripe for this model — so before you get seduced by the idea of nightly income, you need to assess location properly.

Serviced accommodation thrives in:

• City centres with strong tourism and business travel
• University towns during peak term times and graduation weeks
• Secondary cities with housing shortages — especially where students or professionals need short-term housing

Manchester is a great example. With a growing business hub, expanding universities, and a huge regeneration pipeline, the demand isn’t going anywhere soon — we’d recommend you check Manchester’s latest rental projects if this is on your radar.

You’ll also find opportunity in markets where there’s high demand on student accommodation — students arriving to find all halls full will happily pay for short-term options while they get settled.

Pros and Cons (Because There Are Always Both)

Pros:

• Higher gross income potential
• More control over pricing and occupancy
• Ideal for corporate or relocation lets (which are often lower effort than tourists)
• Flexible — you can block off dates for maintenance or personal use
• Strong appeal in tight rental markets with housing shortages

Cons:

• Higher operating costs and more admin
• Legal grey areas in some cities (always check council rules)
• More exposure to seasonality and market dips
• Requires consistent marketing and guest satisfaction to maintain bookings
• Financing can be trickier (not all lenders favour serviced models)

Final Thoughts: Is It Worth It?

If you’re the kind of investor who likes data, optimisation, and building systems — serviced accommodation offers a lot of upside.

Yes, there’s more to think about. You’ll need to research your market, invest in good furnishings, and maybe even get comfortable with pricing software. But the rewards can be significant — especially in cities where demand outstrips hotel capacity and tenants are willing to pay for convenience.

Serviced accommodation isn’t the lazy option. But it can be the lucrative one.