Short-term leasing: High yields with minimal effort

Reading Time: 3 minutes

The sharing economy is disrupting a large number of industries, and the real estate sector is no exception.

Today, services such as Airbnb, Roomorama, HomeAway, and Rentpad enable house and condominium owners to get in contact with people looking for a short-term or vacation lease. It’s an easy way to quickly lease your property on a peer-to-peer basis, and it usually fetches far higher yields since short-term rentals usually come with a premium.

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In turn, holidaymakers or short-term renters of a home are more independent, have greater privacy and usually have more space and facilities than in a hotel room.

Looking East

Looking at Southeast Asian cities such as Manila, but also Bangkok or Kuala Lumpur, normal yields from apartments rented out on yearly or otherwise long-term contracts are at an average of between five to seven percent.

With short-term rents, monthly, weekly or even daily, yields from property leasing can rise significantly. For example, a comparison of Airbnb short-term rates in the above mentioned cities shows a premium of ten to 20 per cent in average on the rent versus long-term leases of the same properties advertised by real estate brokers, whereby luxury condos or penthouses can command even more.

image1

The good thing is that short-term renters are willing to pay the premium as it still mostly comes cheaper than a hotel room, but they normally get a fully-furnished, nicely maintained and designed unit with mandatory facilities such as Internet connection, kitchen, washing machines and air conditioning systems. In some cases, parking services and gym access are also available.

In Manila, for example, short-term rents are available in a broad range, with condos, flats and apartments being the most common kinds and most-used ones. They can serve different purposes, whether for leisure stays, business visits or as accommodation for a study term. If there are more people, there are also bigger apartments or townhouses with self-catering properties and enough space available.

Trends

That said, such short-term rentals need to be managed, particularly if the guest turnover is frequent. While the online portals conveniently function as matchmakers and a payment channel for individuals renting out their property, if an owner himself or herself is busy or has more than one unit to rent out, it is wiser to use the services of a leasing management company to save time and avoid unnecessary complications that may arise, for example if a home owner lacks experience in the property renting business, namely in the legal and fiscal fields.

quote1
Property developers and real estate firms have clearly realized the “shared economy” trend and the more forward-looking among them have already started capitalizing on this global phenomena. These developers help unit owners tap this market which is seen as a growing and lucrative sector for the property industry as a whole moving forward.

As a matter of fact, most property owners in the United States and Europe, and increasingly in East and Southeast Asia, already resorted to contracting a short-term rental management company to manage their rentals for them. These companies handle reservations and billing, housekeeping and property maintenance on a commission basis. In addition, they can also act as brokers.

quote2

Driving Change                 

In Manila, there is a good example for a leasing management service, Siglo Suites by Century Properties. It offers home owners a full-fledged specialty management and leasing service to manage their units, and effectively lease them to short-, medium- and even long-term guests and tenants, where long-term is defined by three months and more.

Siglo Suites prestige package, includes services such as guest ID check, payment processing, post check-out inspection, maintenance, cleaning, advertising and many other related services, can save a home owner up to 22 hours per week, with a service that does not only create more profit from an existing property, but also makes the entire process much more hassle free.

Properties managed by Siglo Suites are all part of the Century Properties Group portfolio and include Knightsbridge Residences, Gramercy Residences, Trump Tower Philippines (under development) and The Milano Residences by Versace in Makati, Acqua Residences in Mandaluyong (under development) and Azure Residences in Paranaque.

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Reading Time: 3 minutes

The sharing economy is disrupting a large number of industries, and the real estate sector is no exception.

Reading Time: 3 minutes

The sharing economy is disrupting a large number of industries, and the real estate sector is no exception.

Today, services such as Airbnb, Roomorama, HomeAway, and Rentpad enable house and condominium owners to get in contact with people looking for a short-term or vacation lease. It’s an easy way to quickly lease your property on a peer-to-peer basis, and it usually fetches far higher yields since short-term rentals usually come with a premium.

image2

In turn, holidaymakers or short-term renters of a home are more independent, have greater privacy and usually have more space and facilities than in a hotel room.

Looking East

Looking at Southeast Asian cities such as Manila, but also Bangkok or Kuala Lumpur, normal yields from apartments rented out on yearly or otherwise long-term contracts are at an average of between five to seven percent.

With short-term rents, monthly, weekly or even daily, yields from property leasing can rise significantly. For example, a comparison of Airbnb short-term rates in the above mentioned cities shows a premium of ten to 20 per cent in average on the rent versus long-term leases of the same properties advertised by real estate brokers, whereby luxury condos or penthouses can command even more.

image1

The good thing is that short-term renters are willing to pay the premium as it still mostly comes cheaper than a hotel room, but they normally get a fully-furnished, nicely maintained and designed unit with mandatory facilities such as Internet connection, kitchen, washing machines and air conditioning systems. In some cases, parking services and gym access are also available.

In Manila, for example, short-term rents are available in a broad range, with condos, flats and apartments being the most common kinds and most-used ones. They can serve different purposes, whether for leisure stays, business visits or as accommodation for a study term. If there are more people, there are also bigger apartments or townhouses with self-catering properties and enough space available.

Trends

That said, such short-term rentals need to be managed, particularly if the guest turnover is frequent. While the online portals conveniently function as matchmakers and a payment channel for individuals renting out their property, if an owner himself or herself is busy or has more than one unit to rent out, it is wiser to use the services of a leasing management company to save time and avoid unnecessary complications that may arise, for example if a home owner lacks experience in the property renting business, namely in the legal and fiscal fields.

quote1
Property developers and real estate firms have clearly realized the “shared economy” trend and the more forward-looking among them have already started capitalizing on this global phenomena. These developers help unit owners tap this market which is seen as a growing and lucrative sector for the property industry as a whole moving forward.

As a matter of fact, most property owners in the United States and Europe, and increasingly in East and Southeast Asia, already resorted to contracting a short-term rental management company to manage their rentals for them. These companies handle reservations and billing, housekeeping and property maintenance on a commission basis. In addition, they can also act as brokers.

quote2

Driving Change                 

In Manila, there is a good example for a leasing management service, Siglo Suites by Century Properties. It offers home owners a full-fledged specialty management and leasing service to manage their units, and effectively lease them to short-, medium- and even long-term guests and tenants, where long-term is defined by three months and more.

Siglo Suites prestige package, includes services such as guest ID check, payment processing, post check-out inspection, maintenance, cleaning, advertising and many other related services, can save a home owner up to 22 hours per week, with a service that does not only create more profit from an existing property, but also makes the entire process much more hassle free.

Properties managed by Siglo Suites are all part of the Century Properties Group portfolio and include Knightsbridge Residences, Gramercy Residences, Trump Tower Philippines (under development) and The Milano Residences by Versace in Makati, Acqua Residences in Mandaluyong (under development) and Azure Residences in Paranaque.

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