Turning IP's into Serviced Apartments

Has anyone sucessfully run their IP/s as a serviced apartment - catering for guests who would like to stay for a couple of weeks or more at a time?

I have a few Ip's that may be suited to this type of an arrangement.

Pros - cashflow should be higher than the usual return available on the standard rental market.

Cons - higher turn over of tenants leading to higher maintenance costs (cleaning etc). Management issues - always needing to find new people to rent the property etc.

Needing to spend money on renovating properties to a suitable standard, provide furniture etc. etc.

Needing to include electricity, water, internet/broadband, etc

Would appreciate your thoughts.

Regards Jason.
We have, here in Canada.Whole other country, I know.
We don't try to go after the high class market. We gear towards the everyday person.We self manage.
We offer to rent by day or week, and have had a few clients.Most short term are her for 1-3 months.Our rents are based on single occupancy and no pets.If there is an additional person and/or cat/dog we charge $xxx a month more.

We market our accommodation as all inclusive.Even someone on minimum wage could afford it. All you need is your food, clothes and a computer, if you want one.Even the laundry room is free for our tenants to use. We have barbeque, picnic table and lawn chairs for our tenants and their guests to use.

We have been operating this property (11 units) for 2 1/2 years. Extremely low vacancy.We have only needed to replace one mattress.(long story).
We clean the rooms ourselves, if needed.Takes about an hour usually.

We have people moving from other provinces and wanting to take the time to find a house.People contemplating, or in the middle of divorce.First time being away from home etc.

Our suites are not large, but that doesn't seem to be a deterrant.Having everything included in the price, seems to be our biggest asset.Also being flexible. If the tenant's circumstances change, we find a replacement asap, and the exiting tenant is always so grateful.

Each suite is self contained.We have been very pleased with the response we have received.

I only advertise on Kijiji which is the equivalent to your Gumtree, so that is free.
I enjoy looking for tenants, as I also answer people's ads "looking for accommodation".
If we had to pay for cleaning and management fees, it may not be economical.
We like short term tenants. Gives us a chance to keep on top of maintenance issues.
Hi Jason,

Kathryn has given some great points from managing a serviced apartment yourself - another way is to have an apartment, in a serviced apartment building, added to the pool of apartments available to let, basically like a hotel room. You pay an astromical management fee (25%ish), and they'll take care of:

* Front desk/bookings
* Cleaning/repairs
* Looking after tenants needs

* Set and forget approach - someone else is doing all the work for a management fee
* Returns are usually much higher than a private rental (from memory, 20% higher, depending on lots of factors)
* Excellent depreciation - I think it's 4% building allowance + depreciate furniture package, etc.

* Kind of implies that you need an apartment in a building that has this form of management in place
* Leases are long - 5 years - hard to get out of
* You have to furnish up to a standard, and keep the furniture updated every 5-7 years or so
* Hard to sell
* Banks will only lend 70% in good times

I'm familiar with the above because I own an apartment in one of these sorts of buildings, but I haven't dipped my toe into the serviced apartment arena yet. My tenant is the building manager and he sub-lets it as a serviced apartment, ie, he puts a furniture package in and puts it into the pool of available apartments.

The benefits of this is that I don't need a property manager, I get paid weekly, every week. I managed to secure a 95% lend against this apartment back in 2007. I let it to him at about $500/week. He lets the apartment out at $320/night. :0
Following on from Jason's post, I have an apartment in a serviced apartment building, however i've found it to be a good experience.

Total fees are about 11% (management, letting etc) and they look after all maintenance and tenancy issues. We are only on a 12 month contract at a time, though 90 days notice is required for termination - though I think had I been more astute at the time I could have got this down to 30 days.
Thanks for the replies everyone,

I am looking at turning the IP's that I currently own in an inner city area into short term accommodation - like a serviced apartment - but without the management fees etc. I would manage them.

What sparked my curiosity into this possibility was that when one of our IP's became vacant recently, we posted a short add on gum tree and received many, many replies. In fact, the add is very old now (over a month) and we are still receiving inquiries.

If we could turn our IP's in this location into a short term rental with furniture, etc, etc, I am certain that our cashflow would improve dramatically.

It's certainly worth having a go to see what eventuates. If it all falls apart we could just put them back onto the standard rental market.

Regards Jason.