Returns on Short-term rental management projects in Lahore by imlaak STR

How much money can you make if you are investing in short-term rental management in Lahore Gulberg? State-of-the-art Short-term rental management is offered by imlaak in its buildings such as Sixty6 Gulberg and we will compare it with renting it out on a long-term basis.

Short-term rental typically deals with properties that are rented out for any period starting from a single day. Long-term rentals are rented out for months or years at a time.

Usually, Short-term rental management has a much higher rental ROI if run by a professional company.

What is Short-term Rental Management

Short-term rental management or STR refers to the supervision and administration of short-term rental properties. The manager or the company in charge of managing these rentals has to complete a long list of daily tasks that involve operations such as:

1. Managing property listings and bookings
2. Cleaning and housekeeping
3. Handling check-ins and checkouts
4. Maintenance & repairs
5. Guest communication
6. Guest reviews management

What is imlaak Short-term rental management Model

Imlaak STR is a short-term rental management model introduced by imlaak. This management is unique to the buildings launched by imlaak in coordination with developers such as imperium developers.

It challenges the traditional rental guarantee project models available in the market. These projects usually consist of hotel or serviced apartments and offer a fixed rental guarantee. Where as Imlaak STR focuses on the investor, empowering them to generate a higher ROI than both the rental guarantee model and the long-term renting out model.

Investing in a property powered by imlaak STR will generate up to a 100% or more ROI for investors if compared with the rental guarantee models. For details on ROI, you should read our guide for investing in rental guarantee projects in Lahore.

Some of the important features of imlaak STR are

Features:

1. Offering landlords the option to either manage rentals themselves on short term / long term or through our pool rental management services.
2. Increase in Rental Income via Dynamic Pricing.
3. The Pool Rental Management System allows transparency.
4. Daily occupancy of the rental pool will be available on the online portal for added transparency.
5. Online Unit Lock Facility for Owners through the portal to book and use Property Personally.
6. Online accounts maintenance and Rental Profit Disbursal to Landlords every month.
7. Resale services through our landlord portal.

Why Serviced & hotel apartments

Imlaak STR model can operate both in typical hotel rooms and serviced/hotel apartments. However, I prefer serviced & hotel apartments for this purpose if you can afford it or else you can opt for hotel rooms.

The latest Global trends HVS report year 2020-21

The serviced apartment sector in Europe continued to see strong momentum in both demand and supply, according to a new report from global hotel consultancy HVS. The demand for serviced apartment accommodation is expected to continue growing at a quicker pace than the traditional hotel industry across Western Europe.

Looking at the performance of the services apartment, both occupancy and average rate recorded year-on-year growth, resulting in a revenue per available room (RevPAR) increase of broadly +7.0%, versus +5.0%  in the traditional hotel industry.

The hospitality industry of Pakistan

The hospitality industry in Pakistan can be divided into 4 different segments:

1. Hotel rooms
2. Hotel/serviced apartments hybrid models.
3. Serviced apartments.
4. Air BnB.

While we see a huge increase in hotel rooms and operators opening up across Lahore, the hotel/serviced apartments and normal serviced apartment sector besides having a competitive advantage in the global market has not received the attention of the private developers in the local market. While some serviced apartment buildings are already operating successfully such as the Heritage luxury suites and Maisonette Hotels & Resorts, the room for growth in this sector is huge.

Short-term rental management is a successful and rising sector of the global economy. We cannot find any companies that offer short-term rental management in Pakistan. This makes it a very lucrative opportunity both in terms of the management business and for investors planning to invest in this sector.

How much rental income will you earn from a property managed by imlaak STR

The estimated rental income of a property managed through imlaak STR will depend on many factors including its location, building amenities, and features, and will vary from building to building.

In order to understand let us do a bit of research on our 5-star, building managed by imlaak STR, Sixty6 Gulberg.

Sixty6 Gulberg Features

Sixty6 Gulberg is the ace of serviced and hotel apartments in Lahore. It is a complete hybrid model offering a 5-star experience with three fine dining restaurants, a coffee and pastry shop, a health bar, and a cigar lounge.

Sixty6 Gulberg consists of 112 spacious 1-bedroom apartments (not hotel rooms) ranging from 556 to 644 sqft, designed to perfection and purpose-built by industry experts for short-term rental management.

It is also the first building in Pakistan that is connected with landlords in real-time through our specialized portal.

It has everything that is needed to run a successful hospitality short-term rental business and offer our guests a 5-star experience, from occupancy sensors to a grand reception lobby, housekeeping to room service, 24/7 reception, and concierge.

Some other key features of the building are as under:

• Rooftop Garden & Pool area of 6,000 square feet
• World-class Gym & spa
• Kids Play area & daycare center
• Hair saloon
• Event Hall
• Maids’ and drivers’ accommodation

The list of amenities is very long, and it is going to be the finest in its category.

The hospitality sector of Gulberg Lahore

Hospitality is a thriving sector of downtown Lahore, and several big brands are already operating. The price of a one-night stay varies from a min of 13200 to 51000 per night.

Short-term rental management in Sixty6 Gulberg

Sixty6 Gulberg is managed through imlaak STR and a short-term rental pool management system.

Pool Short-term Rental Management in Sixty6 Gulberg

A rental pool is a type of contract that involves a sharing arrangement. Typically in rental pool agreements in real estate, the terms of which vary, are commonly used where multiple property owners at a single building manage the rentals of all units as a single source of revenue for expenses such as maintenance, utilities, and remaining profits are distributed as per predefined sharing ratios. It can encompass a variety of properties, including apartments, rooms, homes, condominiums, and resorts.

The Numbers

While calculating it is not just the per-night rents that affect your ROI but also the average occupancy in a pool management system.

As per stats of the hotel industry hotels in Gulberg Lahore have an occupancy varying between 30 to 90% and averaging at around 50 to 60%. We expect occupancy at Sixty6 Gulberg a bit higher than hotel rooms because of the lower supply of hotel apartments in the foreseeable future.

Sixty6 Gulberg will be operational in 2025 with the following stats:

The average rent of a 5-star 1 Bed luxury apartment: 25000 per night minimum.

Occupancy: 30 to 90% and averaging at 60%

Total 1 Bedroom apartments: 112

In the above table, you can see the yearly rental income as per varying occupancy if you invest in a luxury hotel and serviced apartment in Sixty6 Gulberg. In order to ensure maximum rental income we are renting out available apartments for long-term rental. This flexibility allows us to increase overall rental income of our pool.

Why not long-term rentals?

The good thing about this hybrid model is that you can choose between both short-term rental management / imlaak STR management or rent it out long term. The long-term rental model has its own perks and privileges but it comes with one big disadvantage “lower rental return”.

However, when you invest in a serviced and hotel apartment powered by imlaak STR hybrid model, you have the flexibility to opt for the model of choice.

Let us look at fully furnished luxury apartment rents in Gulberg on long term basis:

1 Bed furnished and luxury rent varies between 1 lacs to 1.5 lacs in a 4 or 5-star building. The 2-bed rent varies between 2 to 3 lacs again depending on the building, location, and services provided.

It is important to note that the amenities offered in Sixty6 Gulberg are for a 5-star hospitality experience and no other building exists in Gulberg Lahore which offers hybrid rental management such as Sixty6 Gulberg.

Another important thing to notice is that there is hardly any availability of apartments for rental purposes, which speaks for the demand itself.

In Gulberg 3, not even a single 1 Bedroom luxury apartment is available for rental purposes. While only 11 options are available for 2 Bed apartments.

The Conclusion

The only building that even comes close to the model & amenities offered by Sixty6 Gulberg is the heritage luxury suites. This makes Sixty6 Gulberg a class on its own and three years from now both the per-night rent and occupancy will be higher.

For the first time in Pakistan, landlords will be able to actively manage and see the status of their property online. The fully automated accounts will ensure the timely submission of rent directly to your accounts without any collection headaches.

Globally, the serviced apartment sector is growing faster than the hotel industry, and the same is expected in Pakistan.

The hybrid rental model allows you the safety of long-term rentals while betting for higher rental ROI. While you can choose between both, I strongly advise imlaak short-term rental management.

Short-term rental management powered by imlaak STR is the future, guaranteeing you a higher ROI without any added fuss.

Captain (Retd) Shahnawaz Yaqub Bhatti

Investment Consultant and CEO at Imlaak

Mob : +92 333 1616160 ( Whatsapp)

Mob : +92 300 2048048 ( Whatsapp)