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While buy-to-let investment traditionally caters to long-term rentals for individuals or families, other lucrative opportunities exist to explore. Investing in serviced accommodation offers an alternative to the conventional rental market. With the right property and, crucially, the right location, it can yield impressive returns on investment. As property professionals, our goal is to offer our clients market-leading opportunities. Let’s delve into investing in this niche market to answer the question, “Are serviced apartments a good investment for me”? 

What are Serviced Apartments?

Serviced apartments are fully furnished for short-term or long-term stays. They have amenities similar to a hotel, such as housekeeping, room service, and concierge services. However, they also offer the convenience of a kitchen, living area, and separate bedrooms, making them ideal for travelers looking for a more home-like experience.

Why Are Serviced Apartments a Good Investment?

#1 They Appeal to Everyone

A high-end location, like our apartments at Royal Town Kotor and Royal Blue Montenegro, attracts guests from diverse demographics, including business travelers, digital nomads, and tourists. Repeat short-term tenants, such as business travelers, are more likely to return to the same property, reducing downtime in your annual booking calendar.

#2 Flexible Rental Contracts Work in Your Favor as a Landlord

Having the flexibility to rent out your property for short- or long-term stays can be highly advantageous, especially if your home is near a popular tourist destination. This flexibility allows you to capitalize on peak seasons by charging higher prices for short-term stays, increasing your overall revenue.

#3 High-End Amenities Attracts High-End Renters

Serviced rooms frequently have luxurious amenities and cutting-edge home technology. For example, they may provide extravagant amenities like a shared infinity pool, an activity center, or on-site wellness studios. All of this makes this high-end serviced accommodation extremely desirable to potential customers.

Benefits of Investing in Serviced Apartments

#1 Steady Income

One of the primary advantages of investing in serviced apartments is the potential for a steady income stream. Unlike traditional rental properties, which may experience vacancy periods, serviced apartments are often in high demand, especially in popular tourist or business destinations.

#2 Higher Rental Yields

Serviced apartments typically command higher rental yields than traditional rental properties. As they can be rented out nightly or weekly, investors can charge premium rates, especially during peak seasons.

#3 Lower Vacancy Rates

Due to their popularity among travelers, serviced apartments tend to have lower vacancy rates than traditional rental properties. Lower vacancies mean more stable rental income for investors.

#4 Hands-Off Investment

Another benefit of investing in serviced apartments is that a professional management company often manages them. So investors do not have to deal with the day-to-day management of the property, making it a more passive investment option.

#5 Potential for Capital Appreciation

Like any real estate investment, serviced apartments have excellent potential to appreciate over time, which can lead to a considerable profit on investment when the home is resold.

Considerations for Investors

#1 Location
The location of the serviced apartment is crucial to its success as an investment. Properties located in popular tourist or business destinations attract more guests and earn higher rental rates.
#2 Regulatory Environment
Getting familiar with the regulatory environment governing serviced apartments in their area is essential. Some cities may restrict short-term rentals, which could impact the viability of the investment.
#3 Operating Costs
While serviced apartments can generate a steady income stream, investors should also evaluate the overheads associated with the property, like maintenance, utilities, and management fees. These expenses can have an impact on the total profit of the project.
#4 Market Demand

Investors should assess the market demand for serviced apartments in their chosen location. Factors such as tourism trends, business travel, and competition from other accommodation options can all impact the property’s occupancy rates and rental yields.

How Profitable are Serviced Apartments?

Short-term rentals in popular destinations list at higher nightly rates. Depending on local market demand, serviced apartments can generate 30% higher monthly rent than long-term rentals.

What are the Returns on Serviced Apartments?

Investing in serviced accommodation can yield significantly higher returns compared to long-term lets. Average yields from serviced accommodations typically range between 6 and 10%, achieved through much higher rental revenue, as the property rents on a nightly basis.

Where Can I Invest in Serviced Apartments?

Finding a property investment opportunity in an emerging market is a great way to ensure you make the best out of investing in serviced apartments. Montenegro is emerging as a sought-after luxury destination, and the rise in demand for quality accommodation makes this the perfect time to act. A residence in one of the world’s most active and culturally significant regions is a major advantage of investing in Montenegrin real estate.

You can also apply for Montenegrin residency by investment by purchasing serviced accommodation, allowing you to receive extra perks overseas. Montenegro’s tourism industry is thriving, attracting visitors from around the world drawn to the Mediterranean lifestyle and the unmatched friendliness of the locals in this Balkan nation.

API Investment Offers Luxury Serviced Apartments for Investment

Following the remarkable success of Royal Blue Montenegro, our first luxury serviced apartment complex in Montenegro, we are excited to introduce our newest development at Royal Town Kotor. Our elegant serviced apartments offer you and your guests a luxurious residence. Additionally, with the tourism industry booming in Montenegro, purchasing property here presents a fantastic financial opportunity.

How Can I Manage My Serviced Accommodation?

Where there’s a demand, there’s a service opportunity! If you have answered yes to the question “Are serviced apartments a good investment?” but prefer not to take on the roles of a chambermaid, booking agent, and estate agent all at once, don’t worry. There are professionals who can manage these aspects for you. As API Investment, we provide comprehensive rental management and service solutions to maximize your income. Let us handle every aspect of renting out your unit, allowing you to enjoy the benefits hassle-free.

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Yes, Serviced Apartments ARE a Good Investment

Look no further than API Investment for a serviced apartment investment in Montenegro. Our innovative concept allows you to invest in European real estate and enhance your portfolio with a premium property in Montenegro. Given its imminent EU membership, this is an excellent time to invest in Montenegro. By investing in Montenegro real estate, you can also obtain a residency permit or work permit. Our specialists will guide you on the best course of action and handle all procedures and formalities on your behalf. 

If you’re considering whether serviced apartments belong in your investment portfolio, we’re more than happy to discuss the pros and cons of your situation. Contact our advisors today at API Investment to explore the business opportunities in Montenegro.

One Comment

  • Akshay Maini says:

    I am interested in investing in serviced apartment – but would like one that is still in the planning stages as I would like a gradual/staggered payment while the unit is being constructed. I am looking in the range of 100 to 150 k USD.

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