Have you ever think of renting your property for a short term basis, to fetch a higher rental yield?
It can be as short as on daily rental, up to like weekly or monthly basis.
I can tell you there are lots of demand out there, looking for short term rental. But the inventory is under supply.
As a property investor, do you see any opportunities?
If you want to tap into this niche market, you can start to make a plan – perhaps your 2013 new year plan.
I have years of experience dealing with this segment of consumers, both clients from local and international.
I did explain a little bit on this matter in my website – http://www.jefferylam.com/kl-short-term-rental/
Even until today, I am still servicing this group of people. And, it is a pleasant experience to deal with clients from all over the world.
Towards the end of the year, each year, is a festive seasons, just like now! Most of the people is in their holiday mood and started to travel locally or overseas.
Do you stand a chance to get some business from those travelers?
Nowadays, the spending habit of our consumers has changed. If they are coming to travel for a few weeks to months. They most likely will opt for accommodation such as Serviced Apartment or Serviced Residence.
Why Serviced Apartment / Residence?
- More spacious - 2 to 3 bedrooms with a big living room, dining area and a kitchen to settle their basic cooking needs. It makes them feel more homey.
- It is fully furnished that come with services like house keeping once or twice a week, WIFI, and condo facilities like gym, swimming pool, sauna and etc.
- More suitable for family staying
- You have a much proper place eg. dining area, for discussion with friends or business associates, while having a casual drink
- Some apartment are even pets friendly
Fetch higher ROI
Eg: A 2 bedroom fully furnished apartment can fetch RM3000 per month if you rent on 1 year tenancy; but if you rent for RM250 per night, 1 month = 30 nights x RM250 = RM7500
If occupancy per month is just 60%, you are still collecting RM4500
Gross Return On Investment (ROI) Calculations:-
ROI = (RM3000x12) / RM500k* x 100 = 7.2% [Conventional 1 Year Tenancy]
ROI = (RM4500x12) / RM500k* x 100 = 10.8% [60% Occupancy Daily Rental]
ROI = (RM7500x12) / RM500k* x 100 = 18% [100% Full Occupancy Daily Rental]
*Bought the property at RM500k
Demand higher than Supply
Limited Serviced Apartments in town
Not many owner / investor willing to rent for short term
If you are smart enough, you know what I meant. Gotcha?!
All right, that’s the basic understanding and concept of Why Short Term Rental.
I will update this post again later when I have additional points to elaborate on. Because now I want to continue listening to my Christmas Songs….
Hooo hooo hoooo……!!!!
Wishing everyone Merry Christmas 2012
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