R2SA: Rent-to-Serviced Accommodation

With R2SA you rent a property from a landlord, usually on a company let or management agreement, with written permission to let it out as short stays. You furnish it, list it on booking platforms and keep the difference between what guests pay and your costs.

Because you don't buy the property, the money you need up front is mostly the deposit, the first month's rent and the furnishing. The trade-off is that you get no capital growth, and the landlord can end the arrangement at the end of the term.

• •The landlord's written consent to short-term letting, in the agreement itself. Subletting without it can breach the tenancy and lose you the property and everything you spent furnishing it.
• •If the landlord has a mortgage, their lender's consent. Most standard buy-to-let mortgages don't allow short lets.
• •If the property is leasehold, check the lease. Many leases forbid short lets or running a business from the flat.
• •Insurance that covers paying guests. Ordinary landlord and home policies usually don't.
• •Local rules. In London, a whole home can only be let as short stays for up to 90 nights a calendar year without planning permission. Short-term lets in Scotland need a licence from the council. Elsewhere, ask the council whether planning permission or registration is needed, as rules on short lets are tightening across the UK.

• •Rent to the landlord, payable whether or not you have bookings
• •Council tax or business rates. In England, a property available to let for 140 days or more a year, and actually let for 70 days or more, is assessed for business rates instead of council tax
• •Utilities, broadband and a TV licence
• •Cleaning and laundry between every stay
• •Booking platform commission and any channel manager or pricing software
• •Furnishing at the start, plus replacing breakages and wear
• •Specialist insurance, fire safety equipment and maintenance

Taking paying guests makes the property a business premises under fire safety law (in England and Wales, the Regulatory Reform (Fire Safety) Order 2005). You need a written fire risk assessment, suitable smoke and heat alarms, a fire blanket and extinguisher where appropriate, and clear escape routes. Gas safety checks and electrical safety still apply as they would to any let.

• •Seasonality and empty nights. Model a quiet month, not your best one, because the rent is due every month.
• •The landlord ending the agreement once you have spent money furnishing the property. Agree a term long enough to recover your set-up costs.
• •Rent-to-rent deal packs that promise "guaranteed" income. Ask for the evidence: comparable listings nearby, their nightly rates and their real occupancy.
• •Neighbour complaints and building rules, especially in flats.
• •Relying on a single booking platform. An account suspension can stop your income overnight.