Q. I am a landlord with several rental investments and have recently received an offer via my agent from a serviced apartment company. The agent has highly recommended them but they want to use their own contract and will not pay the usual deposit only provide us with a letter of intent. Do you think it’s worth exploring this or should I steer well clear?
A. Serviced apartments are now big business and certainly prolific in the London area. It seems more and more of the larger corporate companies are working alongside serviced apartment companies to house their employees from overseas both on a short and long term basis. The main reason being is that it is way more cost effective than expensive hotels and also many overseas employees that are offered a relocation package are given housing within their package. Corporates like to be able to go to a one stop shop and that’s where the serviced apartment business has cleaned up. They provide all the little extra things that a regular Tenancy does not. Things like a TV and a weekly cleaner and a welcome pack on arrival as well as towels and bed linen. The flexibility is also key, as they may house someone for one night but long term too which a regular AST does not have the ability to service. As with any tenant the company will need to vetted if you were to agree to rent your apartment via them. Your agent can reference the company itself using a specialised referencing company to make sure that they are a legitimate company, credit worthy and reputable and they have no bad debt history. Also, you will need to check with your managing agents to see if they will allow short let’s as some leases do not allow such short rental terms and you can be in breach of lease. In my experience the Serviced apartment companies usually draw up their own agreements and will usually agree a contract of up to 2 years. The letter of intent serves as a deposit would in that they agree to hand the apartment back to you in the same condition that they rented it, and if they are a reputable company it would not be in their best interest to do anything but, as it would affect future business if they left even one apartment in a less than perfect condition. Remember the power of the internet when it comes to a negative review. Having worked with a couple of these firms I can honestly say they are some of the best kept apartments and their rental payments are always prompt, so as long as you have done the necessary checks I would have no hesitation in recommending this as a brilliant option to landlords.