News: Home Builders Turn to Rental Management Firms Amidst Supply Glut

Feb 8, 2019

 

Amidst the high number of unsold completed houses, especially high-end units, property developers are seeking the help of companies that manage Airbnb rentals to generate income from these homes while they await buyers, reported Bernama.

Notably, the typical rental strategy for less pricy homes don’t work well with luxury houses as their rental prices are rather expensive. Also, just one bad tenant can lead to huge losses as high-end homes are usually fully-furnished and the cost of fixing or replacing broken furniture and appliances can be significant.

As the tenant of these homes must quickly vacate the premises if there is a sale, home builders shun monthly or annual leases.

To tackle the aforementioned issues, developers have turned to Airbnb, but demand was lacklustre. In fact, data from the home-sharing portal showed that homes in Malaysia were only rented out at an average of 19 days for the whole of 2018.

However, a company that manages Airbnb rentals in the country said their proprietary marketing methodology and service guarantees can help property developers attract short-term tenants and keep the rental properties in good condition.

According to Plush Services’ Managing Director Yap Zer Ken, they have established a track record of providing their clients with income surpassing typical monthly rents.

“Daily leases can be lucrative but it needs constant monitoring and adjustments based on incoming queries. Our methodology offers enough flexibility on daily rates because our focus remains on achieving monthly targets for the client.”

Yap revealed that Plush Services is not just focused on securing occupants, but also provide day-to-day property management.

“We remove the burden of upkeep from our clients. We have daily cleaning services, which also keep check on any damages within the residences and get these addressed immediately at no extra cost.”

In addition to Airbnb’s major damage insurance guarantee, Plush Services also has additional insurance coverage. “So the client is never inconvenienced for necessary repair or replacement funds should something unexpected happen,” noted Yap

He revealed that he and his sister started the company to help clients avoid issues they encountered when they listed their own empty apartment on Airbnb. “Sharing experiences with others made us realise there was a niche waiting to be tapped.”

Good client reviews resulted in some property investors knocking on the duo’s doors, seeking their help in renting out vacant luxury homes in the heart of Kuala Lumpur. The demand increased greatly that Yap and his sister had to hire several employees to cater to more requests.

After securing management rights for more than 100 units, the company started to get calls from developers, who want to generate income from lots of unsold completed homes.

“You have to remember, developers almost always take loans for their projects and have to continue paying finance charges if there are units still unsold. Short-term leasing helps defray these finance charges,” he added.

Thanks to the daily maintenance of the rental properties, developers no longer need to be face upkeep issues when renting units via Airbnb. Developers can also conveniently access the units in case a potential client shows up.

 

Image source: The Malaysian Reserve

 

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Annie Leong
Principal
REN: 2023
Jann Properties
annie@jann.com.my
+6012-2146033
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