R2SA: 2025 Guide To Rent to Serviced Accommodation

Rent to serviced accommodation, or R2SA, is a property market model that is rapidly growing in popularity. It combines the high rental yields of serviced accommodation with the low entry threshold and flexibility of rent to rent, generating a higher income for property investors. But what is rent to serviced accommodation or R2SA as it is commonly known, and how does it work? Read on to find out more about this exciting investment model.

Table of Contents

What is Rent to Serviced Accommodation (R2SA)?
How Does R2SA Work?
What Qualifies as Serviced Accommodation?
Do you need Planning Permission for R2SA?
Legal Requirements for R2SA

What is Rent to Serviced Accommodation (R2SA)?

Rent to serviced accommodation means renting a property and then offering it to others as serviced accommodation. This model is very similar to rent to rent, only the property is offered as serviced accommodation rather than a traditional let. This model has gained popularity recently due to its ability to generate high levels of income, as serviced accommodation can command higher rental yields than traditional rental properties. Landlords and property owners benefit from R2SAs, as they get guaranteed rent for a longer period than with Assured Shorthold Tenancy agreements, providing a reliable cash flow. Their property is also more likely to be better maintained due to the higher standards of serviced accommodation. Property entrepreneurs benefit from R2SAs as they can make much higher profits from an asset they don’t own, providing a great entry into the property investment market with little upfront cost.

How Does R2SA Work?

Step 1: Find suitable properties

The first step is to find suitable properties. These will be properties in high-demand areas, most likely cities with good transport links or popular holiday destinations. You will need to find a property with an owner or landlord who is interested in entering into an R2SA deal with you as you will need their permission to offer the property for rent yourself, much like rent-to-rent properties. A property with all of the above and the option for a long-term lease of 2-5 years is ideal.

Step 2: Furnishing the property

You will then need to furnish the property with good-quality furniture and appliances that will attract the kind of customers used to the high-end experience that serviced accommodation can offer. Remember, you are expecting a higher rental yield than regular rentals so the quality of the furnishings should reflect this. Serviced accommodation tenants will expect the property to provide more than regular residential lettings, from TV and broadband, linens, towels and even cutlery, so bear this in mind. The ‘serviced’ part of R2SA requires that the accommodation offers some services, such as cleaning, concierge services, or other perks like gyms and swimming pools. Think about what you can offer and what kind of tenant the property will attract – are they staying in the area for work or leisure? This will help you put together the most attractive service package.

Step 3: Managing the property

Consider whether you will be managing the R2SA property yourself. This can be time-consuming and requires you to be on call more than a standard residential property, so you may want to engage the services of a property management company. They can handle tenant queries as well as cleaning and maintenance, saving you valuable time. This comes at a cost, so weigh up your options carefully and look around for different quotes to find a competitively priced property management company.

Step 4: Marketing the property

You can advertise your R2SA property using online platforms such as Airbnb, Booking.com or other platforms that specialise in offering serviced accommodation. This will incur some costs, but it will help you reach your target audience.

What Qualifies as Serviced Accommodation?

Serviced accommodation is always fully furnished and provides similar amenities that you would expect in a hotel such as cleaning, but in a self-catering environment. The property lease must allow short-term sublets, otherwise you could be operating illegally. Operators must have appropriate management contracts in place as well as insurance including public liability and professional indemnity insurance.

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Do you need Planning Permission for R2SA?

It is important to obtain planning permission for R2SA properties where required. If the property usage is already specified as short-term lets or holiday lets, no further planning permission is required. Enquire with the landlord and local authority to find out for sure if planning permission is required and how to obtain it. Not every property will be suitable for R2SA, so check this before entering into any contract.

Legal Requirements for R2SA

As well as planning permission, consent from the owner or landlord and suitable insurance, there are other important legal requirements for R2SA properties. They should have a fire risk assessment and be compliant with fire regulations for short-term lets. An HMO licence may also be required depending on the size of the property, which will incur more compliance issues too.

You can create a successful property business using the R2SA model, but an important thing to remember is that you need to treat it as more of a service business than just a residential let. Tenants will expect more from serviced accommodation which justifies the higher cost. If an appliance breaks down, they will expect it to be repaired or replaced in hours rather than days, and the service aspect cannot be ignored, so cleaning and 24-hour customer service are non-negotiables for a successful serviced accommodation venture. This is rapidly becoming a popular investment so there are already a few different options, meaning that you need to be competitive to succeed. This isn’t something that should put you off – just something to be aware of. With this guide, and your own research and due diligence, you too can become a successful property entrepreneur using the highly profitable R2SA model. Good luck!

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