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Nightly Rates vs. Monthly Rent: Serviced Accommodation vs Buy-to-Let Revenue
- DNB Future Properties
- Mar 28
- 4 min read
Prefer to read the full guide? Download the full guide here.
"Does Serviced Accommodation (or a Furnished Holiday Let) actually make more money?"
Serviced Accommodation vs Buy-to-Let Revenue
This is the single most common question we get from landlords considering the switch from Buy-to-Let (BTL).
When you look at the raw numbers of Serviced Accommodation vs Buy-to-Let revenue, the answer is almost always yes—provided you understand the fundamental difference between Fixed Rent and Dynamic Revenue.
With traditional Buy To Let (BTL) margins being squeezed by rising interest rates and punitive Section 24 tax changes, it is time to look at the math.
Here is why the "Nightly Rate" model is the financial upgrade your portfolio needs.
The Revenue Ceiling vs. The Revenue Ladder
The problem with the Buy To Let (BTL) model isn't just the regulation; it's the income cap.
Buy-to-Let (BTL) = The Ceiling: Your income is capped by the market rent. If the going rate is £1,000/month, you get £12,000 a year. That’s it. You cannot charge more for weekends, summer holidays, or when a massive event comes to town.
Furnished Holiday Lets (FHL) = The Ladder: Your income is dynamic. You might charge £100/night on a quiet Tuesday in November, but £250/night on a Saturday in July. You capture the peaks of the market, not just the average.
The "Void" Myth vs. Strategic Vacancy
Landlords are terrified of voids. In the Buy To Let (BTL) world, an empty month is a disaster that eats into your profit.
In the Serviced Accommodation world, we don't call them voids; we call it vacancy. Here is the mindset shift you need to make:
A Buy To Let (BTL) property needs to be occupied 100% of the time to make 100% of its potential income.
A Serviced Accommodation (SA) or a Furnished Holiday Let (FHL) property often only needs to be occupied 50-60% of the time to beat the income of a BTL.
Real-World Example: The 50% Occupancy Win
Let’s look at the numbers for a standard 2-bed apartment in a city center to illustrate the Serviced Accommodation vs Buy-to-Let revenue difference:
Traditional Rent: £900 per month.
Total Monthly Income: £900
SA/FHL Nightly Rate: £150 per night (average).
If you book just 15 nights (50% occupancy):
Total Monthly Income: £2,250
Even after deducting higher utility bills and cleaning costs (approx. £600), the Serviced Accommodation (SA) or Furnished holiday let (FHL) creates significantly higher net cash flow than the Buy To Let (BTL).
Crucially, you achieved this with the property sitting empty for half the month—drastically reducing wear and tear on your carpets and fixtures compared to a tenant living there 24/7.
The "Gross Yield" Advantage
When the revenue ceiling is removed, the Gross Yield on Serviced Accommodation (SA)/Furnished holiday let (FHL) properties consistently outperforms residential tenancies (ASTs soon to be APT’s). This gives you a crucial financial buffer against rising mortgage rates that Buy To Let (BTL) landlords simply don't have.
In our next post, we will discuss the "Tax Hack" that makes this even more profitable (Hint: It involves paying less Council Tax).
Want to run the numbers on your own property?
We are providing readers with a FHL/SA Revenue Calculator.
Simply download and add your properties numbers to see if you could increase your profits today!
Want to get started alone?
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