In this financial crisis and when the real estate placement becomes again a safe investment for many national and international investors, what is the most dynamic form of rent?
With no doubt, the one of the seasonal furnished flat rent. This option is generally little known and little used by the real estate investors who prefer generally the stability that represents the regular income of a long-term rental with regard to a vacation rental; however this last option is even today a playground full of promises for the well advised investors.
Can you be more specific?
Of course. First of all I think that everybody understood the interest of the seasonal furnished flat rent in a region open to the tourism, and all year round, summer as well as winter, with hotels that often have no vacancies. But beyond this report, we see developing for some years a particular tourism, particularly attracted by the rent of holiday residences weekly or monthly. This phenomenon has increased so much that the profession formed itself little by little to answer to this demand. And so administrators' new generation appeared on the market offering these services of vacation rentals, private administrator (director), occupations well known abroad under the name of rental agents and property managers.
What are the motivations and the expectations of the customers attracted by the rental vacation with regard to the traditional hotel business?
Mainly the freedom, they can also have a big flexibility in their schedule, in the choice of their entertainment and their available options without any limit of choices and services generally offered by hotels. Then there is the financial aspect. One week of rent in a furnished apartment will cost generally cheaper than one week in a hotel, sometimes several couples of friends rent a big luxury apartment to share the costs. Finally there is a phenomenon of fashion and lifestyle, because this is often the opportunity for the tenants to spend their holidays in an apartment and an environment for a lower price than a traditional stay in a hotel.
What advantages this method represents for the owners?
They are different and various. First of all the owner keeps a total control of his property, because he makes a commitment for very short period rentals. Then the risk of outstanding payment is zero considering the fact that generally apartments are reserved and paid months in advance. Besides, the prices of rent higher than for a long-term rental (empty or furnished flat) and all this accumulated allows to generate a maximum income for a limited occupation. It’s not rare, if the apartment is well located and well managed, to see owners generating a return on investment (except fees of banking) of 8 to 12 % a year… what represents a real difference with regard to 4 to 5 % per year which we can hope of a long-term rental. Other fiscal advantages, in particular connected to the fees of management or to a possible financing can be added, and it allows you to revitalize your investment and your real estate portfolio (?).
What are the possible risks?
They are mainly connected to a passive or over liberal management. That’s why it is necessary to grant a big importance for the choice of the professionals that you will choose to help you to find tenants, those you will keep to administer the apartment and provide the services necessary for the comfort of the tenants and for the maintenance of the apartment.
How can we protect ourselves of this?
First of all, think about your project and establish a strategy well defined with the real estate agent who will assist you in your approach. Don’t ignore anything: the address, the nearness of the businesses, the restaurants and the beaches, the exposure, a terrace, a view are so many elements which will strike a potential tenant at the appropriate moment. Then choose an administrator whose specialty is vacation rental, and not to hesitate to ask him for references as well as for renting simulations of profitability, it will be for him a security of your seriousness and your determination. Finally at the appropriate moment do not hesitate to decorate finely/with taste your apartment and to equip it with all the comfort and the necessary technology, it is proved that the customers satisfied with their stay will return next year and shall recommend you their friends, so year after year you will optimize the occupation rate and your return on investment.
A last advice?
Yes and a simple one. The majority of the seasonal tenants begin their researches on the internet. You can, in coordination with the real estate agent who will have the responsibility to rent your apartment, position yourself your property on web sites specialized in the rental vacation. The formalities are very simple and usually very affordable. It will certainly allow you to find customers directly and so to generate an additional renting income without having to pay a commission for the rent.
In a few words…
This movement is going to become more important in the future, a real phenomenon of fashion (?) and social behavior. To diversify today your properties in furnished apartments destined for the rental vacation, will allow you to revitalize your investments and to increase the income of your investments (placements?) in a spectacular way.