When renting your property on a short term basis its vital you have the correct mortgage. The correct Serviced Accommodation Mortgage offers you funding to buy your purchase. This type of mortgage will allow you rent the property on sites such as Airbnb, Booking.com etc.
Typically you can rent your property for no longer than 3 months to the same person. What this means is you cannot rent it to anyone on a longer term basis. The tenant needs to leave the property before 3 months is up.
Thats perfect for Airbnb and other such sites which are focused on short term rentals.
These mortgages are great for investors who want to cater to markets like Airbnb, contractors and business travellers.
You can provide alternative accommodation to a traditional hotel stay. This type of accommodation is becoming more and more popular due to its flexibility.
Your mortgage payments are offset by the rental income you achieve from your services accommodation. A lender will take into account your expected monthly income before deciding to lend you money.
Depending on its location, a serviced accommodation property could be used for a holiday let. The term “serviced accommodation” broadly covers a property used for short term rentals.
However these types of property can be used for business travellers and for various other reasons. What we are really looking at here is a short term rental.
How Much Can You Borrow With A Serviced Accommodation Mortgage?
Usually, serviced accommodation mortgages allow you to borrow up to 75% of the properties market value. Lenders entertain properties that are both freehold and leasehold for serviced accommodation / holiday lets.
With a buy to let property normally houses are more desirable, with a holiday let we find flats do much better.
One thing that can be a problem is when a property has a short lease. Get your solicitor to check the length of the lease during purchase.
Serviced Accommodation Mortgage Rates
Serviced Accommodation Mortgages are similar to a standard buy to let. You will find rates almost identical to those, the only difference is you are getting permission to let on a short term basis.
However the lenders might not seem so familiar as this is a more niche market.
Serviced Accommodation Mortgage Lenders
I always suggest you use a mortgage broker to find you the best deal. However there are some lenders to take a look at when looking for a suitable mortgage.
Wattsford Finance
Holiday Let Mortgage UK
Make sure you find a lender with a good interest rate. Going for a fix rates is much better than a variable rat as it gives you certainty.
All lenders will have minimum income requirements and a strict lending criteria. Speaking with the lender or your broker will help you understand the maximum loan you can get to buy a property.
Running a holiday home as a business should be seen as a long term investment. Costs can be high up front as you will need to furnish the property.
However its a great strategy and you can make some serious money. Check out my in-depth serviced accommodation guide here.
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