A serviced apartment is one that is small but fully furnished, has a small kitchen which is well equipped, has a telephone, internet and other facilities. It is in many ways similar to a hotel but it is much cheaper than one though it has facilities for housekeeping and maintenance. And serviced apartments are fast catching up in the list of the Indian real estate investor as is proving to have a good return on investment rate when it comes to rental yield.The concept of serviced apartments in India started to flourish in the cities of Bangalore, Mumbai and Delhi which were leading the country in the corporate sector activities in 2003-04. Now serviced apartments are present in all the cities of India. The main client base of serviced apartments is constituted by the corporate sector. Executives of multinational companies and emigrant who need to live and work in the country for weeks and often months in different locations especially in the business hubs, prefer to stay in serviced apartments on rent rather than hotels.Serviced apartments are mostly developed and ran by big hotel chains such as Hyatt, Ascott, Marriott etc. Hilton Hotels is also planning to start its own chain of service apartments. Though service apartments were retained mostly by the builders to be used as low cost operations same as hotels. But now many developers are building serviced hotels to be sold to individual buyers. Most of the buyers are ultra rich who want to have a house in the various locations they travel to for work or for pleasure. But serviced apartments can fetch good rental returns to the owner.At present statics show that while residential apartments can fetch an annual rental yield of 3 to 4%. But the annual rental yield of a serviced apartment can range between 9 and 14%. The returns however depend on the location just like it does in the case of any other real estate investment. Serviced apartments located close to business hubs and having good connectivity will certainly yield better rentals than the once that do not have the privilege of location. So far service apartments in the national capital region have proved to be the best investment option. Some Delhi based developers are ready to assure a 14% per annum return on the minimum investment of only Rs 10 lakh.India has an expanding economy and global opportunities and as well as increased career options will inevitably increase the demand for serviced apartments. It can also be a preferable living option for people looking for luxurious living. At present services for serviced apartments are only offered by local firms who operate for individually owned service apartments. Some firms manage the properties without providing any service.The sector will flourish even better if professional companies offering management services along with hospitality firms enter into the field of providing service. Some individuals who own serviced apartments maintain and manage them by themselves.Even keeping all those factors aside service apartments are in high demand and when located strategically can have a better rental return than residential apartments in the same area.