Converting your property to service apartment: Prepare for additional costs

While service apartment is a lucrative business proposition, converting an apartment to a service apartment may cost a substantial amount of money as services must be at par if not better than most luxury hotels.

Tenants for Your Rental Property

More and more executives are travelling to India for onsite works for small periods of time and people migrating in search of employment or education opportunities. Since staying in hotels for such long tenures is not always a viable options, business travellers and corporate are using service apartments offering them the comforts of three to four star hotels with discounted prices. For the apartment owners, turning an apartment into a service apartment would mean higher rentals than normal lease pricing. It is no surprise that a lot of people are turning their apartments into service apartments in order to gain the advantage of extra rental income compared to traditional rentals.

Let us look at various aspects of service apartments and their associated expenses for the apartment owner.

Service apartments must be accompanied with premium facilities

Before you make up your mind to offer your apartment for rent as a service apartment make sure that your apartment fulfills the basic criteria for such service apartments. Unlike regular apartments that are leased out or rented, service apartments must be accompanied with various furnishings and premium facilities.

Some of the basic facilities expected by clients include air conditioning, refrigeration, washing machine, a furnished kitchen, television sets in each room with individual set top boxes or cable, internet facilities either through a broadband cable or high speed dedicated line amid others. The basic essence of service apartments is that they offer facilities at par with premium three or four star hotels with comparatively lower rentals.

Service apartments and their associated expenses

If you are planning to convert your residential flat or apartment to a service apartment, think again. It comes with extra cost. Owners of service apartments need to be at their toes to make sure their apartment is ready for clients at any given point in time. One has to make sure all appliances are in working condition at all times. The apartment owner needs to tie up with a local repair or customer support service for malfunctioning of any appliance.

Offering an apartment as a service apartment may also mean paying higher maintenance charges usually in line with commercial rates to the resident’s welfare association. Any apartment lacking in quality services is unlikely to be accepted as service apartment and therefore there are no half measures when it comes to upgrading the features and services offered.

Getting a stream of clients is an essential

Getting a stream of clients is an essential aspect of running a successful serviced apartment service. Apartment owners can have tie up with travel agents who would ensure regular clients but take a cut for their services thereby reducing the overall expected income. The better the services provided, the higher is the chance of getting clients.

Of course, the location of the apartment plays an important role and sometimes the deciding factor for a successful service apartment. The property location does not always need to be a posh locality although it helps if the ambiance is sophisticated and modern. Ideal location, for service apartments, is the ones that are located near offices, ensuring the occupant a minimum travel time. You can also tie up with various companies offering them service apartments exclusively for their staff. The companies may seek discounts for a long term agreement again reducing the financial gain to an extent.