Serviced Accommodation - Luxury Model vs Budget Model
Luxury vs Budget in Rent-to-Rent Serviced Accommodation
There are two main ways people run serviced accommodation. And just to be clear, I’m talking specifically about the rent-to-rent model here.
For anyone new to this, rent-to-rent is where a company rents a property from a landlord on a long-term agreement, typically three to five years, and gets permission to operate it as serviced accommodation. So instead of the usual tenant setup, the company sublets the place on a nightly basis through sites like Airbnb, Booking.com, Vrbo etc. It’s legal (with the correct agreements and property checks made), above board, and gives the landlord a guaranteed rent every month. If the rent’s not paid, the contract can be terminated. So it’s pretty easy option for landlords, as long as they’re working with people who know what they’re doing.
Right, so within that model, there are two very different ways to run things: the budget model and the luxury model.
The Budget Model
This is how most operators do it and to be fair, it can work well. You take on a property that’s already in decent shape (good kitchen, clean bathrooms, nothing falling apart), and you furnish it on a tight budget. For a 2-bed flat, furnishings and staging might cost anywhere between £3,000 and £6,000. You’ll pay the first month’s rent and deposit on top of that.
The idea is to spend as little as possible to get the place live on the platforms. As long as it looks decent and functions well, you’re good to go.
This model works best in busy towns or cities where people are just looking for a clean, functional place to stay. Nothing fancy. If the numbers stack, you could be pulling in £500 to £1,000 a month per unit in profit. It’s seen as a good beginner strategy and there's nothing wrong with it if that’s the goal.
Now typically, the budget model can attract longer stays. Because they’re more affordable, they suit contractors, professionals working locally, people relocating, or anyone who wants a more home-like setup instead of a hotel room. That can mean lower nightly rates, but also less physical turnover and fewer cleans, which definitely has its benefits.
The Luxury Model (What We Do at ZEN Stays)
We run the same model at ZEN Stays — rent-to-rent — but we’ve taken a different route. Higher investment, higher standards, higher returns.
Instead of going wide with loads of average units, we go deep on fewer, more premium ones. Our whole approach is to build wow-factor stays in high-end areas. We’re really picky about where we take on properties. Only going for locations where we know there’s demand from guests who are happy to pay more for something that feels special.
What do we mean by “luxury”? It’s not just a posh rug and some droopy plants in the hallway lol.
We go all in:
Hot tubs if there’s a garden
PS5s fully loaded with games
Arcade machines and pool tables
Massive 85-inch TVs
Bold, creative interior design (not your usual boring greys)
Saunas in some units
Good quality finishes, all wiring hidden, and absolutely zero corners cut
We repaint entire properties in durable, high-traffic paint before launch, every single time. We've got set designs we use in all our properties, so it's not about starting from scratch every time. Parking, balconies, outdoor space — all of these get treated as key must-have features.
Yes, setup costs are higher. We typically spend:
£20k to £25k on a 2-bed
£30k to £35k on a 3-bed
£40k to £50k+ on a 4-bed
But the return reflects that. One of our two-bed units can bring in £2,000 to £6,000+ per month depending on the season. Completely different ballpark.
Now, the luxury model does mean more turnover. Because the rates are higher, guests usually stay for shorter periods. So there are more cleans, more changeovers, and yes, slightly higher running costs. But the margins more than make up for it if done correctly.
That said, it’s not all short stays. We’ve had month-long and even two-month stays from wealthier guests needing a base while relocating or travelling for work. There is a market out there for high-net worth guests in need of mid-term accommodation. We get a lot of families visiting from the US, and a strong market from international travellers who are happy to pay more for a unique stay. The longer bookings do happen, but you’re mostly dealing with higher-paying guests staying for weekends and short breaks.
And here’s the big thing, we’d much rather have five high-end units doing strong numbers than twenty average ones scraping by. Less admin, fewer problems, easier to scale without building a massive team or drowning in contracts and maintenance.
So yeah, it costs more upfront. No denying that. But when done right with the correct systems, the luxury model can be smoother, more profitable, and honestly, a lot more fun to run. These are fun places in super desirable areas where you would want to go with your friends for a weekend.
Final Thoughts
Both models work. It just depends on what kind of business you're trying to build.
Budget units can be great for consistent income with less turnover. However, because of the limited setup budget, it’s harder to stand out in what’s becoming a pretty saturated market. Luxury units are bold, standout spaces that hold their own even when the market’s crowded. They do need more capital and a bit more hands-on setup, but the upside can be massive
If you're thinking about getting into rent-to-rent, or want to scale what you're already doing, make sure you're choosing a model that actually fits your goals — not just what everyone else is doing.
And if you got value from this, feel free to reach out. Happy to chat, share more, or point you in the right direction. Always good to connect with others in the game.
