The management company FlatHome24 has been operating in St. Petersburg since 2014. As of December 2024, we manage and sublease more than 120 properties located in different areas of the city. This is the result of many years of work.
However, the biggest boost to our development came after the pandemic, when we reconsidered our business model. We started working not only with daily rentals, but also added apartments and flats rented monthly to our portfolio.
What is short-term, medium-term and long-term rental?
First, let’s look at the terminology. What is laos telegram data considered a short-term lease, and what is considered a medium-term or long-term lease?
From a legal point of view:
Long-term lease is the hiring of residential premises for a period exceeding one year. Such agreements are necessarily registered with Rosreestr, and an encumbrance is imposed on the property, which is reflected in the extract from the Unified State Register of Real Estate.
Short-term leases are leases for a period of less than one year. Such contracts are not subject to registration, there are no encumbrances on the property, and they are much easier to terminate.
It is because of these features that most owners prefer to conclude contracts for 11 months – this simplifies the procedure.
However, in everyday life the terms are used differently:
Long-term leases What are long tail keywords and how do they bring in customers are often referred to as contracts for 11 months.
Short-term rental is considered to be renting for a period of 1 to 30 days.
Medium term is a new term that has appeared in the slang of realtors, landlords and advertising platforms. It means a lease for a period of 1 to 6 months.
In this article I will use terms as they are commonly used:
Short term – rent up to 1 month.
Medium term – rent from 1 to 6 months.
Long-term rent – from 11 months.
How has the rental market changed?
Every year the market changes, and botswana business directory daily rental management does not stand still. Just 5-6 years ago, most landlords rented out housing exclusively on a daily basis, and this brought in a stable income all year round.
However, in recent years the situation has changed: competition in the market has increased, seasonality has increased in a number of regions and cities of Russia, demand has fallen in the off-season, and many entrepreneurs have begun to rent out apartments on a monthly basis “until summer” in order to survive this period.
But how profitable is it? How does medium-term rent differ from daily rent, besides the term? Let’s take a closer look.
Advantages and disadvantages of daily rent
In markets with low competition and without pronounced seasonality, daily rental remains the most profitable format.
However, it has its downsides:
1. Frequent change of tenants. This leads to constant expenses on advertising, marketing and finding new tenants.
2. The need for regular cleaning. You either have to clean yourself or hire maids. If there are many objects, the costs for supervisors, technicians and other employees increase (as it is arranged at FlatHome24).
3. High operating costs. Utility bills, internet, minor repairs and maintenance are entirely the responsibility of the owner.
During the high season, these expenses are offset by high rental prices and full occupancy of properties. But during the off-season, when demand falls, revenues often do not cover expenses.
How did we calculate this?
At FlatHome24, we have conducted a detailed analysis to understand how profitable different rental formats are.
We divided all expenses into two categories:
Fixed costs : rent (or management fee), utilities, Internet, employee salaries, back office costs (telephony, cash registers, programs, website support, etc.).
Variable costs : costs that depend on occupancy. These include costs for household chemicals, OTA (online travel agency) platform commissions, advertising costs, laundry costs, transportation, depreciation of linen and textiles.
Based on this data, we constructed profitability (marginality) tables for each property, taking into account seasonality and monthly profitability.
What did the analysis show?
The first important conclusion is that not all properties are equally profitable throughout the year.
We often see that the “fat” months of the high season compensate for the losses in the off-season. But if we consider the profitability of properties on a monthly basis, it becomes clear which apartments bring profit and which ones work “in the minus” in certain periods.
For example, at the end of the year, an object may be profitable, but this is only due to a few months of high demand. In the off-season, such apartments bring losses, which are “fed” by income from the high season.
How did we optimize the work?
As I have already noted in my previous articles, business is always about numbers. It is difficult to argue with their logic and transparency.
Having calculated the income and expenses in this format, we made a decision to transfer some of the properties to medium-term lease before the end of the season.