A few days ago, news of soaring rental prices in first- and second-tier cities caused an uproar. Intermediaries engaged in malicious competition and price manipulation, leading to multiple agencies such as Ziroom, Xiangyu, and Danke being summoned for talks.
Who will foot the bill for the severe consequences of price inflation?
A Beijing residentMr. Chentold reporters that he owns a120-square-meter three-bedroom apartment in a residential community in Tiantongyuan, Changping District, which he intended to rent out. After making several inquiries, he unexpectedly triggered an “intermediary bidding war.” According toMr. Chen, his property’s monthly rent was around7500yuanor so, but afterbeing bid up in turns byZiroom,Dankeand several otheragencies,the rent was driven uprepeatedly,reaching10800yuan per month—a sudden increase of3,300 yuanbefore even being rented out. At the time, the agent from Danke Apartments alsostated that no matter how much Ziroom offered, theywere willing tomatch and eventop it by300yuan.
In this game of capital, it may seem like the landlords are the winners while the tenants become the hapless ones forced to foot the bill, but even worsethingsare yet to come: once the intermediary secures the listings, control no longer lies with the landlord. If a shady agent cashes out the tenants’ rent and absconds with the money, leaving the landlord unpaid and the tenant without a place to stay, who will be left to bear the loss? Even if the agent doesn’t do that, when theygaincontrolof enough listings and obtain the power to set rental prices,at that time,，both tenants and landlords，will become sitting ducks, at the mercy of others..
When weighing the interests, short-term rental platforms come out on top
“The noble-minded love wealth, but they acquire it in the right way.” Landlords must not be tempted by short-term gains and end up as “fools”! So how can one attract guests without going through an agent while still retaining full control over their property? The increasingly popular short-term homestay rentals in recent years offer a good alternative.
First, in terms of property rights, landlords can use platforms such asAirbnb and 一家民宿 to get guests for free, but the decision-making power over the property always remains with the landlord, who can adjust prices appropriately based on peak and off-peak seasons or rental durations.
In terms of cash flow, reporters learned that platforms like 一家民宿 typically settle payments per booking. Once the guest checks out, the platform automatically transfers the money to the landlord’s account, which is easier to manage compared to the quarterly or annual payment methods used by agents.
In terms of returns, it’s no less profitable than renting to an agent. Take a property near the Wudaokou subway station as an example: a unit of over 50㎡ in that area rents for around8,500 yuan per month. But the same type of unit in the same location listed on 一家民宿 for daily rentals goes for about700yuan per night. According to short-term rental market norms, with an occupancy rate of roughly70%per month, the monthly income would be around14700yuan, earning nearly7percent more than renting to an agent.
This shows that running a short-term homestay can be a great investment strategy.
For property investment, Japanese real estate is in the spotlight
If buying property in China’s first- and second-tier cities is too expensive and you’re tempted but lack the capital, investing in Japanese real estate is also a good option.
In recent years, the booming tourism industry in Japan hasto a large extentboosted the development of homestays, especiallyThe passage of Japan's "Casino Bill" and2020the upcoming Tokyo Olympics in2020 have led to a surge in visitors to Japan,which has undoubtedly made short-term rental properties highly sought after. Not only inAirbnbJapan, but also on a Chineseshort-term rental platform, Japanese listings make up a significant portion.
For real estate investors, location is the most crucial factor when purchasing a property, as it directly impacts the occupancy rate of a future short-term rental.Convenience of transportation istheprimary consideration when choosinga residence for living or travel,as no one wants to waste a lot of time and energy oncommuting. Therefore,the most suitable areas for investing in short-term rentals are all near central transit hubs.。
So what are the housing prices like in these areas? After inquiring with local Japanese real estate companies, reporters learned that taking the densely scenic areas of Kyoto—Kamigyō-ku, Nakagyō-ku, and Shimogyō-kuas an example, the most popular option is renovated second-hand homes, with floor areas of50-7030 to 42 square meters costing between 42 million and 71 million yen, approximatelyRMB250-4502 to 4 million, and the nightly rent for an entire house is mostly around500RMB.。As for smaller ordinary apartments, it might be possible to purchase one for less than one million yen. Real estate companies statedthat this areaofa homestay can achieve an annual net return of8-15%around.
However,can you just buy a residential property in Japanand turn it into a homestay?The answer is no.If youare not familiar with the current state of homestays in Japan,don’t know about the new homestay law, and have no ideahow to apply for a homestay licenseor how to manage operations, YANG Lianghai, CEO of one homestay, has solutions for these issues.CEO Yang Lianghai told reporters: One Homestay has been strategically investing in properties in Japan and has established a subsidiary there. For real estate investors in Japan, One Homestay uses big data analysis based on booking trends to identify user preferences for property types, sizes, locations, styles, etc., helping people choose high-value properties with better investment returns. More importantly, One Homestay can also assist investors with obtaining homestay operation qualifications and managing operations.
Nowadays,
the role of a house has long gone beyondjust being a place to live,“A place to stay”somaking a smart investment in homestay real estate seems to be one of the safest financial strategies today. Rather than living in constant anxiety, it’s better to seize the right opportunities and embrace the trend head-on.