Written by Zainal Zikri & Nasuha Aiedn
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In the second part of our homestay business series, we will explore our selection process. Selecting where to operate your homestay can make or break your business. Some people pick a kampung house, near the beach, in the city or even within their taman! This is usually in mid-size towns where the dewan is the centre of many activities. A rented house in a mid-sized town is usually below RM700 a month. You can charge a few hundred a night hence you only need to rent it out for 4 nights to turn a profit already, pick those houses near a dewan with lots of kenduri kahwin!
For the purpose of this article, we will share only how we select units based in condos. For houses we are not the expert but the strategies we use should be applicable for houses as well.
New vs Existing Condo in a Popular Location
We always pick an existing condo that is popular as there is already a sizable ready market for it. Our definition of an existing condo is any condo more than a year old. There are operators who will pick a newly built condo in a popular location because it has less competition from other operators though you would need to do heavy marketing and more manpower to promote the new condo.
For new hosts, it is always better to pick a popular condo in a good location in MyRehat’s view as you would spend less time explaining to people where your homestay is.
Once you have identified a condo, you have to do due diligence:
- Does the management of the condo allow for homestay business? If not, then you better pick another place as the majority will always win and you will be fighting needless battles to operate. Of course, they are people who operate anyway in a place that is not favourable to homestay businesses.
- How can guests enter the condo? In the beginning, MyRehat would check in all our guests. But as the number of our units grew that was no longer possible. So, it is important to see if the condo has easy access to the mailbox for guests to take the key and friendly management allowing taking of key from the mailbox.
- Utilities are a big expense of any homestay operator, especially TNB. So, it’s important to see if the condo utilities are commercial or residential rate. The difference between commercial and residential rates is 30%. Example if the residential rate TNB let’s say RM200 a month while commercial is RM260. That’s a 30% difference!
- The amenities. One of the reasons people come to stay at a homestay condo are the amenities. There are many amenities but for MyRehat the swimming pool and rooftop is key. People will pay extra if they know your condo has a great swimming pool and a spectacular view.
- Fully Furnished. MyRehat only takes fully furnished units. What we mean by this: TV, beds in all rooms, water heater, aircons, fans, lights, kitchen, and stove. Of course, our preference is always units that were previously managed by other homestay operators.
If you have a condo in Kuala Lumpur that you do not want to manage that fits our criteria do contact us, we would love to manage it for you. Happy reading everyone!