by BERNAMA / pic by MUHD AMIN NAHARUL
WITH the overall property market remaining soft especially for upper-medium to luxury-priced residential units, developers are looking at alternate means to generate cashflow from these properties in the interim.
However, the usual leasing strategy applied successfully with medium-cost residences does not work so well with higher-end properties because the monthly rentals can be rather prohibitive.
Further, it takes just one bad tenant to wipe out any gains from leasing out these typically fully-furnished units as the cost of replacing broken appliances and fixing damaged fittings can be quite high.
Since these units also need to be quickly available if a sale is secured, monthly or annual leases can be a bit messy to manage.
To get around these issues, some developers have dabbled into short-term leases of between one and seven days at a time via the Airbnb service, but the take-up has been rather disappointing, as Airbnb statistics showed.
For 2017/18, despite strong demand from thrifty visitors, Airbnb revealed that units in Malaysia were leased out on an average of just 19 days throughout the year.
But, an Airbnb specialist said these shortcomings can be addressed using proprietary marketing methodology developed in-house, together with service guarantees to ensure the leased properties remain pristine.
In an interview recently, Plush Services Sdn Bhd MD Yap Zer Ken said the firm has established a track record of generating leasehold income in excess of typical monthly rentals.
“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,” he told Bernama.
Yap explained that Plush Services, which he co-founded with his sister, isn’t just about securing tenancies.
“More importantly, 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.
“On top of major damage insurance guarantees which Airbnb provides, we also have additional insurance coverage.
“So, the client is never inconvenienced for necessary repair or replacement funds should something unexpected happen,” Yap said, adding that the firm’s specialist service began as an effort to help others avoid frustrations faced when he and his sister first leased out their own empty apartment on Airbnb.
“Sharing experiences with others made us realise there was a niche waiting to be tapped,” he said.
Words-of-mouth references soon led to some property investors, with empty high-end residences within the city centre, engaging both brother and sister to manage their properties for Airbnb rentals and they had to eventually set up a full-time team to handle these requests.
After building up a portfolio numbering over a hundred residences, the firm began to get calls from property developers seeking to generate some revenue from hundreds of unsold properties which had already been completed.
“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 explained. With regular cleaning and maintenance being part of the service offered by Plush Services, developers no longer need to be concerned with these issues and would also be able to regain access to their properties quickly for potential customer viewing.