People have different songs, but mine is one for centuries... These words of the legend and cult singer of the last decades of the last century, Stas Namin, perfectly reflect a person’s commitment to entrepreneurial activity. Everything here is extremely simple. If someone feels an irresistible urge to “work for themselves,” then they will find a way to self-realize. And you don't have to look for a new or unique idea to become an entrepreneur.
You can “make” money from the most basic needs of a person, including the need for housing. No, we are not talking about the construction industry, interior design or renovation services. There is a specialized type of activity where you can get by with minimal investments - both financial and organizational. This is a short-term rental business.
Vitality and competitiveness: theoretical background
Before starting any type of business, it is worth carefully analyzing it from the point of view of its potential and prospects. Actually, you need to get an answer to the question of how profitable it will be, what is its demand and whether it has opportunities for expansion and development.
Renting out housing for a short period of time as an entrepreneurial project has a number of advantages:
- constant consumer demand for the service;
- simplicity of organization (conditional);
- relatively high income.
If we analyze each of the points in detail, we get the following picture.
1) Demand is guaranteed by a number of factors:
- Daily rentals are of interest to clients with different budgets focused on this service, ranging from minimal to large sums. One category wants to save money, the other is looking for maximum comfort.
- The insufficiency of offers in the hotel industry makes it possible to attract attention to the daily rental of apartments from those who come on a business trip, and those who are looking for home comfort, and those who find themselves during the “peak” and cannot rent a room due to... that everything is busy.
- Anonymity and absence of “prying eyes”. It is clear that often this format of housing is of interest to people who want to hide the very fact of renting it. No one will force a client who rents an apartment for a day or a few hours for an intimate meeting or other purposes that he wants to keep secret to register. The safety of property can be ensured not only by taking a copy of the passport and attaching it to the contract, but also in other ways. In addition, the lessor can guarantee complete confidentiality of information.
- Possibility of "autonomy". When comparing staying in a hotel and staying in an apartment, the latter option has a number of advantages. A kitchen, washing machine, and iron provide a complete set for self-service. Anyone who rents an apartment can easily provide themselves with the comfort of home and save money on services imposed by the hotel format. In addition, he can eat “at home”, rather than in cafes and restaurants, and cook his own lunch or dinner, which will cost several times less.
- Mode. The apartment and the keys to it in your pocket provide freedom of coming and going. No restrictions on night time or visits. Here lies a very effective mechanism for attracting a certain category of clientele. You can rent out housing by the hour, which is convenient for many people.
2) In this type of activity there is only one difficult point - the availability of real estate at the disposal of the entrepreneur. Although its solution can be approached in different ways. All other organizational aspects are subject to the control of a person who does not have specific knowledge and skills. They also do not require major capital investments. What's important here is:
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- Establish communication with potential clients. This can be a variety of advertising, ranging from placing advertisements on poles to promoting a project on the Internet.
- Organize the process of acceptance and transfer of the apartment. It is clear that not every tenant is guaranteed to be neat, crystal honest and not damage property, even by accident. Therefore, it is necessary to document the rental, for example, concluding a rental agreement for an apartment with furniture, so that later there will be someone to make claims against.
- Debug the household side of short-term rentals. Not only the initial stage, interior design, furnishing, equipment with household appliances, utensils and the like are important here. Equally important are regular cleaning jobs, changing linen, preventative care and routine repairs of utilities and household appliances.
Advice : to use word of mouth to advertise your services, you need to pay attention to the little things that make life more comfortable. High quality bed linen, several towels in the bathroom, salt and spices in the kitchen, cable TV and Internet access - all these nuances can greatly increase the attractiveness of a particular home. This is exactly what your former clients will tell their acquaintances and friends about, respond positively on social networks and give you free and very effective advertising.
3) High level of profitability. There is a simple algorithm involved here:
- A long-term lease will provide less benefit in terms of cash flow from customers over a given period. If, when renting for a year, you receive 100 units per month, then short-term rental will increase this figure by at least 30-50%. This is due to the fact that wholesale (long term) involves lower payment.
- It is worth noting that you will have to incur more expenses for short-term rentals, although they are fully covered by client payments.
- It must be taken into account that there is much more effort, as well as time spent, in the short-term option.
That is, short-term rental of apartments is a relatively highly profitable business, easy to organize and set up, and does not require major investments. The latter is very conditional; this point requires detailed consideration.
Conclusion
In conclusion, I would like to say that the daily apartment rental business is suitable for those who have innate stress resistance and entrepreneurship.
You won’t earn a lot of money from this, however, it is quite possible to reach the level of the average salary in the region, as well as partially automate the business in a year or a year and a half.
And that's all for me.
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For the future, I have planned many articles specifically for the real estate section, so the content will be useful and interesting.
All the best and good luck
