Top 5 Reasons Investing in Serviced Apartments Could Be Right for You
Serviced apartments may not be top of mind when it comes to considering options for property investment, but there are many compelling reasons why you should be weighing up the benefits for your property portfolio.
- Reliable cash flow
The way serviced apartments work means that your rental income is guaranteed, so you can genuinely rely on that cash appearing in your account every month. When you purchase a serviced apartment, you enter into a long-term lease with a management company, as opposed to an individual tenant. The management company then pays you the agreed rental rate for the term of the lease, usually with pre-negotiated rental reviews to ensure you’re getting a good market rate. This makes serviced apartments a great option if you’re looking for something that provides a reliable, regular cash flow.
- Long-term lease = no vacancy worries
The long-term nature of the lease with the management company means the usual concerns about loss of income when the property is vacant don’t apply. The management company leases the apartment from you, then offers the apartment for short-term stays (like a hotel), recouping its costs through per-night charges. To you, the investor, it doesn’t matter whether the apartment is occupied or not: you are still guaranteed your rent. And because the lease is for longer, there’ll be no periods of vacancy between short-term tenants, offering more security to the owner.
Owning a serviced apartment provides peace of mind knowing that the day to day maintenance is taken care of by the business operator. Daily room cleaning, minor repairs and any accidental damage are all covered under the lease and conducted without reference to the landlord who can rest easy knowing the apartment is looked after 24/7. Major repairs or replacements of fixed appliances are the responsibility of the landlord, just as is the case in any other investment property. However, these are arranged for by the tenant who appoints the qualified trades to undertake the work. The repair or replacement is undertaken seamlessly, providing the landlord with a hassle free investment.
- Lower fees and charges
This is one of the things that really makes serviced apartments attractive to people who want an investment option with no surprises. When you purchase a serviced apartment, a number of the normal landlord outgoings are paid for by the tenant. There are no management fees typically paid to estate agents to look after your investment, and no letting fees, resulting in a higher new return. Rent increases built in to the lease and known outgoings make for an easier lifestyle and a clearer business budget for your investment.
- Due diligence taken care of
Finally, when you buy a serviced apartment, you know the management company have done the location due diligence for you. The company will most likely have dedicated researchers scouting out specific locations based on a range of factors that will make them suitable for developing serviced apartments. These factors may include existing or future infrastructure, socio-economic development and the demographic profile of the area. Regardless, the benefits of each location will be spelled out for you to help you make a decision on where to buy.
With great reasons like these, you’ve got nothing to lose looking into investing in serviced apartments. Whether you’re looking to buy your first property, or another property for your portfolio, serviced apartments offer investors some excellent benefits that are definitely worth investigating.
Quest Properties has over 25 years’ experience considering the location, infrastructure, job growth opportunities and return on investment to ensure their investors have long term security.
There are over 5,000 strata titled apartments owned by private investors who enjoy exceptional returns and enviable cash-flow benefits.
Quest Properties offers affordable property investing options with high rental returns (commonly around 6.5% plus) and attractive tax deductions. A Quest property is a secure, high yielding investment with extra benefits like no property or letting fees.
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*Original article published with Your Investment Property can be found here.