If you’ve traveled for work or stayed somewhere between a hotel and a home, chances are you’ve come across a serviced apartment. They’re fully furnished, come with regular cleaning, and offer a flexible stay — and lately, they’ve caught the eye of property investors.
So, are serviced apartments a good investment in today’s market?
That depends on your goals. These properties can offer strong rental income and appeal to both business travelers and tourists, especially in places where hotel prices are high or space is limited. But with every potential reward comes a set of risks — from high management fees to changing travel trends.
In this blog, we’ll unpack the pros, the cons, and everything in between. Whether you’re new to real estate or looking to diversify, this guide will help you figure out if serviced apartments deserve a spot in your investment portfolio.
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The Benefits of Investing in Serviced Apartments
Serviced apartments sit somewhere between hotels and homes. For guests, they offer privacy and comfort with hotel-like perks. For investors, they open the door to a flexible and often profitable way to earn from real estate.
But are serviced apartments a good investment? Let’s look at a few reasons why they’re gaining popularity.
1- You Can Earn More from Short-Term Stays
Unlike traditional rentals, serviced apartments are often let out by the night or week. This means you can adjust pricing based on demand. Busy seasons, business conferences, or tourism spikes can all lead to higher income compared to renting long-term.
In cities that attract business travellers or tourists — think Riyadh or Jeddah — this model often leads to better rental yields than standard apartments.
2- Less Daily Hassle for You
Many serviced apartments are run by management companies. They take care of cleaning, check-ins, and maintenance. You’re not chasing rent or fixing leaky taps on a Sunday night. This makes them a good fit for investors who want a hands-off approach.
3- More People Want This Kind of Stay
The way people travel has changed. Some stay for weeks at a time on work trips, others want a kitchen and some space when they travel with family. Serviced apartments meet these needs, which keeps occupancy rates high in the right areas.
4- It Helps Spread Risk in Your Portfolio
If you already have a long-term rental or another kind of investment, adding a serviced apartment gives you a bit of variety. This can help balance risk, especially during market ups and downs.
Why Serviced Apartments Are a Lucrative Investment Opportunity
Investing in serviced apartments can generate solid returns while growing your property’s value over time – making it a compelling investment option, especially in markets like Saudi Arabia that are seeing an evolving economy.
There’s a reason more investors are turning their attention to serviced apartments. These properties tend to strike a balance between flexibility, cash flow, and long-term value — especially in fast-growing markets.
Let’s unpack what makes them stand out.
1- Higher Income Potential
Compared to a typical long-term rental, a serviced apartment can earn more month to month. Charging by the night or week, not by the month adds up – creating higher income potential.
Serviced apartments mainly serve business travellers and expats, especially in cities like Riyadh and Jeddah. That kind of consistent demand helps keep occupancy levels high and income steady.
2- Strong Demand in Growing Cities
There’s a shift happening in how people travel and work. With more professionals taking short assignments or relocating temporarily, the need for fully furnished, move-in-ready places is rising. That’s exactly what serviced apartments offer.
Saudi Arabia’s tourism and business scenes are also picking up speed under Vision 2030. As more people visit for work or leisure, the need for short-term stays will only grow — and that puts serviced apartments in a strong position.
3- More Flexibility, More Control
One of the underrated perks of this type of investment is control. You can adjust your pricing depending on the season, keep certain dates for personal use, or take a break when needed. That kind of flexibility isn’t always possible with a regular lease.
And if you’d rather be hands-off? You can hire a management company to handle bookings, cleaning, and guest communication. Many investors find this worth the cost to save time and stress.
The Risks and Rewards of Investing in Serviced Apartments
Serviced apartments can be a solid investment — but they’re not without a few bumps along the way. If you’re thinking about jumping in, it’s smart to look at both the good and the not-so-good. Let’s keep it real and break it down.
What Makes Them Worth It
- They can bring in good money.
If your apartment is in a spot where people actually want to stay — near business hubs, hospitals, or tourist areas — the returns can beat those of traditional rentals. A few nights booked each week might be all it takes to start seeing decent cash flow.
- It’s not just about rent.
Aside from monthly income, your property might also grow in value over time. If the area improves or demand rises, you could make a profit down the line when you sell.
- You’re not locked into one type of tenant.
With short stays, you get more flexibility. It’s easier to adjust pricing, test different strategies, and change direction if something isn’t working.
What You Need to Watch Out For
- Empty nights hurt.
When bookings drop — and they will from time to time — there’s no backup rent to rely on. This isn’t a regular lease where you know what’s coming in every month. That means you’ll need a buffer.
- It costs more to run.
Between regular cleaning, fresh linens, furniture upkeep, and online listing fees, the bills can stack up fast. Serviced apartments need to be well-kept if you want repeat guests or good reviews.
- Laws are changing in some places.
Cities around the world are cracking down on short-term rentals. Whether it’s stricter licensing or new tax rules, you have to stay in the loop or risk getting fined — or worse, being shut down. - You’ve got competition.
It’s not just you out there. Other landlords are offering stylish, well-priced apartments with good service. If your place isn’t up to scratch, it may get passed over.
How to Maximize Returns on Your Investment in Serviced Apartments
Buying a serviced apartment is just step one — what really matters is how you manage it. With the right strategy, these properties can generate solid income and long-term value. But it takes more than just listing it online and hoping for bookings.
Here are a few things smart investors do to boost their returns.
1- Choose the Right Location
This one’s a dealbreaker. You want a place near business districts, tourist attractions, or hospitals — anywhere people actually need short-term stays. In Saudi Arabia, cities like Riyadh and Jeddah are seeing strong demand for this kind of rental, especially around new developments and growing economic hubs.
2- Get the Setup Right
It’s worth spending a little extra upfront on good furniture, fast Wi-Fi, and hotel-style touches. People notice the small details — and great reviews lead to better visibility on booking sites. The better the experience, the more repeat guests you’ll get.
3- Partner with a Reliable Management Team
Unless you plan to clean rooms and answer guest messages at midnight, you’ll need a solid team. Property managers who specialize in serviced apartments can handle bookings, maintenance, and customer service — so you don’t have to.
4- Adjust Pricing Smartly
The best returns come from dynamic pricing — adjusting your nightly rates based on demand. Higher prices during peak seasons, lower rates to fill gaps. Tools like Airbnb’s Smart Pricing can help, but you can also use a manager or service that tracks local trends.
5- Track Performance Over Time
Don’t just set and forget. Review your occupancy rate, income, and costs every few months. If the numbers aren’t where they should be, look at what’s dragging them down — and pivot. Sometimes a few small changes (like new photos or better check-in instructions) can make a noticeable difference.
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Are Serviced Apartments a Good Investment?
Serviced apartments can be a smart way to invest — but only if they align with your goals and financial situation. They offer a mix of convenience, strong rental potential, and growing demand, especially in places like Saudi Arabia where business travel and tourism are expanding. That said, they’re not the kind of investment you jump into lightly.
You’ll need to think about more than just location and price. What kind of guests will stay there? How will the property be managed? Can you afford periods with no bookings? These are the kinds of questions experienced investors ask — and it’s worth slowing down to ask them too.
For many people, serviced apartments strike the right balance: more flexibility than traditional rentals, fewer complications than hotels, and a strong chance of steady income if you pick wisely. But the key word here is wisely.
That’s why it helps to work with people who know the market and have the tools to help you decide. At Gamma Assets, we support investors with the research, insights, and practical guidance needed to make confident real estate decisions — without overpaying or guessing your way through it.
If you’re serious about growing your portfolio and want to explore serviced apartments with clarity and control, now’s a good time to start.
