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Optimizing Yield from your properties

Optimizing Yield from your properties

With many of our properties remain vacant during this period of time, it is not surprised that we ponder or consider converting them into an Airbnb unit or similar short-term rental. As a host, you receive a higher rental income. Most of the time, the yield is much higher when you rent them for short term stays compared to classic leasing.

What kind of yield can I expect from Short Term Rentals?

Just like running a business, it depends on how well you manage your business and portfolio. Short Term Rentals such as Airbnb or any other homestay tends to bring in better room rates compared to classical long-term rental.

But one thing that most property managers can agree upon, it is better than having units vacant for months, which generates zero yields, despite having to repay mortgages.  

The profitability and yield of your short-term rental depends on your room rates and occupancy rates.

Room Rates

room rates

Your room rates are quite dependent to the location of your property, as you will need to follow room rates similar to your neighbours. Having units around KLCC with a view of the famous Petronas Twin Tower would have a better rate compared to a unit in Petaling Jaya. This criteria is really important, especially if you plan to rent your flat on a long or medium-long period.

Of course, when you are charging a premium room rate, your guests would expect better furnishing in your units, such as 100% Cotton bedsheets, 100% cotton towels and pocket spring mattresses. Or else, they will be disappointed and leave you with bad ratings.

Occupancy Rates 

occupancy rate

However, some of us are managing existing properties for our clients and we do not have the liberty to choose which property to manage. What we can manage more is the Occupancy Rate. We are able to increase occupancy rates by promoting our units to the right audience, through platforms such as Airbnb and Booking.com. In addition, we can also promote it through other social medias, or even create a referral programme.

Some hosts also give out discount vouchers during Off-peak seasons to keep the occupancy rates high, without lowering your price and standards. Or even offering FREE pickup service, FREE car rental or any other offers.  

Many may argue that this will result in price dumping of room rates. We think that it is better than having vacant units that generates no revenue. Offering a better service would make guests refer others to check in to your units, even during Peak Seasons, when these services are chargeable.


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