The furniture quote is the number everybody budgets for. It is rarely the number that decides whether the first year works. Setting up a serviced apartment in London is a stack of small, boring costs, and most of them arrive before the first guest does.
The visible cost
Furnishing and equipping a one bedroom apartment to a standard that earns good reviews typically runs into the low thousands, depending on whether you buy new, ex display or second hand. Call it a few thousand pounds for a one bedroom, more for two. That figure is the one people plan for.
The costs that get forgotten
- Photography and listing setup. Bad photos cost you occupancy every month. A proper shoot is a few hundred pounds and stays useful for years.
- Linen and consumables at scale. Not one set. Several, so a same day turnaround is possible without washing at midnight.
- Cleaning and laundry per turnaround. This is a per booking cost, not a monthly one. It scales with occupancy, which is why high occupancy is not automatically high profit.
- Utilities and wifi. Often higher than a standard let, because guests do not ration heating and the property is empty between stays.
- Council tax, or business rates. Check which applies. There is a self catering threshold based on nights let per year, and it changes the annual cost meaningfully.
- Insurance written for paying guests. A standard landlord policy will not do, and the specialist cover costs more.
- Compliance certificates. Gas safety, electrical installation condition report, energy performance certificate, alarms, and any licensing your council requires.
- Platform commission. Between a few percent and the high teens depending on the channel and the listing model. It comes off the top of every booking.
- Replacement and wear. Guests are harder on a property than a tenant. Budget for it monthly rather than pretending it will not happen.
- Accountancy and bookkeeping. More transactions, more receipts. It is a real monthly cost.
- The quiet season. Not a cost as such, but the thing that empties the account you built up in summer.
A rough shape for a one bedroom flat
These are London ballparks for planning, not quotes. Get real prices for your property and your borough.
- Furnishing and equipment: a few thousand pounds, one off
- Photography and listings: a few hundred pounds, one off
- Compliance certificates: several hundred pounds in year one, then renewals
- Linen, consumables, welcome stock: a few hundred pounds to start, then ongoing
- Insurance: several hundred pounds a year, more than a standard policy
- Cleaning and laundry: per stay, scaling with occupancy
- Utilities, wifi, council tax or rates: monthly, whether or not there are guests
- Platform commission: a percentage of every booking
Where people under budget
Three places, consistently.
First, they treat the setup cost as the furniture instead of the whole launch, so the first two months of operating costs have nowhere to come from. Second, they plan for the good month and not the quiet one, so the first January is financed on a credit card. Third, they assume they will do the cleaning and the messaging themselves, then discover that a same day turnaround and a full time job do not coexist.
What the first ninety days actually look like
Costs go out from day one. Income ramps up as reviews accumulate, because new listings are judged on very little. Pricing is guesswork until you have a few weeks of real data. Some bookings will be lovely and one will cost you a new mattress.
Plan the launch with a cash buffer that covers the setup, three months of fixed costs, and one significant repair. If that buffer does not exist, the honest answer is to wait rather than to launch thin.
The test before you commit
Add the setup costs to the first year’s fixed costs, subtract that from a conservative revenue estimate, then compare it to what the property earns as a standard let. If the difference does not justify the work, the property is telling you something.
General information, not financial advice. Costs vary by property, borough and standard. If you want the numbers for a specific flat, send me the details.
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