How to establish a profit model for long-term rental youth apartments in Shanghai

Long-term rental of apartments is an industry that people pay more attention to in recent years, especially in first-tier cities like Shanghai. The development of long-term rental apartments is very rapid. Its customer base is mainly aimed at white-collar apartments, which is an emerging industry in the third-line real estate market in recent years. It is to rent out the owner's house, transform it, equip it with furniture and appliances, and rent it to white-collar workers around the house in the form of a single room.

According to the different distribution of houses, the operation modes of long-term rental apartments are mainly divided into centralized and decentralized. Among them, centralized long-term rental apartments are operated by the whole property, and decentralized long-term rental apartments are operated by decentralized houses. In both cases, occupancy rate and profit rate are important indicators of its operation. Centralized long-term rental apartments adopt a more traditional operation mode, and decentralized ones start late. The main challenge lies in apartment management and community operation. Relatively speaking, the management cost of centralized apartments is lower than that of distributed apartments. If it is a self-sustaining property, you can also enjoy the profits brought by the appreciation of the property, so there is more room for profit.

However, as far as the current market performance of long-term rental apartments is concerned, most long-term rental apartment enterprises are in an embarrassing position of profit because they are in the initial stage of development and have invested a lot of money in the early stage. How to establish a profit model has become a difficult problem for enterprises.

The initial investment of centralized long-term rental apartments is relatively large, especially for some enterprises with heavy asset operation mode, which takes a long time to recover the cost, generally around 10 years, but most centralized long-term rental apartments have normal cash flow and relatively healthy development. For distributed long-term rental apartments, the key to profit is to find the cost of many factors such as room distribution density, service strength density, decoration density, bye density, and the balance between profit and expansion mode.

Long-term rental apartments generally go through three stages to achieve profitability, namely, single-store profitability stage, expansion stage, expansion speed and management lead to a decline in profitability, and the scale stage forms real competitiveness.

Under the control of China's current real estate policy, the entry threshold for long-term rental apartments is still relatively low. Although it is not difficult to enter this industry, it is still difficult to achieve sustained profitability, and it is even more difficult to maintain a high profit rate for a long time. It is predicted that in the future, the China market will embrace the industrial chain first and then the assets. In this process, enterprises with advantages at both ends are not excluded, or more professional enterprises are derived, such as decoration, housekeeping and moving. These will be the profit models of long-term rental apartments in the future.