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Serviced apartments, the latest category of properties to join the ‘commercial real estate’ definition, are now becoming an attractive option for investment for many. Serviced apartments are furnished accommodation with a kitchen. The rooms are usually more spacious than hotel rooms and offer more flexibility than a hotel room. They have all the communications facilities like internet, fax and telephone.
You are reading: Serviced Apartments! The Various Aspects of Investment and Management
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This type of construction has become a viable option for investment for many as the returns are good and there are fewer risks associated with investment. Serviced apartments can be found in metros like Delhi, Mumbai, Pune, Chennai, Bangalore and Hyderabad, among others. Sometimes they can be found in smaller cities also like Surat and Vizag. Serviced apartments are popular among corporate clients as they want to provide accommodation to their employees. Sometimes even expatriates that come and work in India take these apartments on rents for the durations ranging for few weeks to months. We look at some of the aspects of investment and maintenance of serviced apartments:
1 Yields: The rentals yields from investment in serviced apartments are quite attractive and range from 8-14 percent. There is capital appreciation too of the serviced apartment. The rental yield from a residential property can be just 3-4 percent. Each room can fetch a tariff of Rs 3000-10,000 per night, depending on the location and clients.
There has been an increase in the number of companies that offer ‘serviced apartments’ as a service and a residential property can be given to them for running it as a serviced apartment, if the owner does not want to operate the property himself/herself. These companies charge 15-20 percent of the fees or charge received per night. There are real estate companies that run serviced apartments and offer 14 percent assured returns to the investors in such property.
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2 Permits Required: Since it is a commercial activity, if the property is in a proper residential area then a NOC is required from the society. A police permit is also required for running a serviced apartment. The municipal authority is also required t give permission. If there is a common kitchen in the serviced apartment, a restaurant license will be required. A fire safety permission is also required.
3 Leading Hospitality Brands In Serviced Apartment Business: There are big hospitality chains that are in the business of providing serviced apartments. Grand Hyatt has Marriot International have their serviced apartments in various Indian cities. Hotel Leela Venture and Hilton Hotels have also started their serviced apartment business. He there are lot of companies which take a residential property and run serviced apartment business from there. An owner of a residential property can give the property to such a company and such a company will charge a commission for managing it.
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Source: https://ecis2016.org
Category: Lifestyle
