We have had this property in our portfolio for several years but up until now it has always been let as a standard “Family Let” on an Assured Shorthold Tenancy (AST) agreement.
Lancaster, Morecambe and Heysham benefit from all three of the major requirements for Serviced Accommodation to work well, a hospital, a university and tourists. In addition, while not yet confirmed, there is the possibility of the Eden Project securing the investment required and being built on Morecambe promenade which will attract a huge amount of additional tourists to the area.
There is even talk of a third Nuclear Power Station being built in Heysham!
With this in mind, and the fact the sitting tenant has just left to take a job in Sheffield, we have decided to take the opportunity to change our strategy and rent it as serviced accommodation.
Our property agent has already advised that due to the current market and shortage of quality property’s we can increase the gross rent by 30% if we choose to re-let it on a family let basis using another AST however, we believe that with a little investment, we can increase the previous gross rent by up to 287% if we achieve 60% occupancy.
So, what is required to make the change?
After a look round the property it is in generally good condition only requiring minor decorative maintenance to re let as a family let.
However, if we are to get good reviews and comments from our serviced accommodation guests in the future we need to do a little more colgetic work as well as furnishing the place to a good standard as it was previously let unfurnished. Good reviews are vital for attracting both new and repeat bookings.
What investment is required ? We have budgeted for £3,000 to be spent on upgrading the décor and £5,000 to furnish and equip the accommodation. In addition there will be a further £500 spent on professional photography once the place is ready.
The funds have already been sourced from an investor who had money on deposit and was looking for a much greater return than is available at the banks but didn't want to take any investment risk, they wanted a good fixed rate return. The couple who are in their 50’s have already committed to further collaborations and investment loans when additional opportunities come along.
The plan is to have the property ready to be advertised by the end of June 2022.