1~3Ultra-short-term rental business, which rents officetels or studio apartments for short periods of months, is popular in famous academies, university districts, and gosi towns in Seoul.


Seon-kyung Yoo (pseudonym) who lives in Boryeong-si, Chungcheongnam-do·53) does not forget the days when he traveled all the way to Seoul for his children's education. During vacations, I took my two sons and rented a house in an academy district in Daechi-dong, Seoul. The cost of renting a two-room officetel on an ultra-short term basis for two months is without a deposit. 300Ten thousand won. monthly rent 150Although 10,000 won is quite strong, there were quite a few parents, even if not Mr. Yu, who were exceptionally generous in investing in their children.

After sending his two sons to college, Mr. Yu entered the ultra-short-term rental business himself. Dedicated near Dosan Park in Nonhyeon-dong instead of Daechi-dong, Seoul 25100 million ㎡ one-room3000I bought it for 10,000 won. It was judged that the demand for foreigners for plastic surgery and tourism would be more consistent than the demand for visiting academies only during vacation. The rent for this studio is usually a deposit 300010,000 won, monthly rent 35Although it is 10,000 won 1~3No deposit required for tenants renting for a short period of months 70Rent it for 10,000 won. at least in a year 10For about a month 3~4Since there are ten tenants, the annual rental income is minimal. 70010,000 won, the rate of return is 5.4%. If there is no vacancy 12If the months are full, the rate of return is 6.5Increases to %. When renting the same studio all year round at the original market price (annual 4.2It is more advantageous than %).

With summer vacation in full swing, ‘ultra-short-term rentals (monthly rent)’ are becoming popular in Seoul’s university districts, academy districts, and gosi villages. This is because if you manage vacancies well, you can increase your profits by paying a monthly rent higher than the market price. ‘Ultra-short-term rental’ refers to renting an officetel, studio apartment, or small apartment for a short period of time and receiving monthly rent.

▶Demand group of local students, exam takers, and tourists

Real estate can be operated flexibly

The appeal of ultra-short-term rentals is 1~3Contracted on a monthly basis 1~2The point is that the period is much shorter than a yearly monthly lease. In some cases, a tenant who rents a room from the landlord rents the room to another person (sub-lessee) through sub-lease.

Of course, ultra-short-term rentals are not a completely new phenomenon. 1990Short-term rental, which started as 'foreigner rental' in the Gangnam area of Seoul in the 1990s, has now become active in various forms everywhere. Even if it is not a foreign rental, it appears little by little at the end of the year, when the fall season ends and the university vacation begins. This is because it is a time when tenants who cannot complete the one-year contract period due to school vacations and are moving out are urgently looking for a 'substitute' tenant to move in for a short period of time.

Who are the demand groups who want ultra-short-term rent?

The demand group is diverse, including international students who briefly returned from overseas for summer vacation, foreigners who came to Korea for language training, test takers who came to Jongno or Noryangjin from the countryside, or local middle and high school students who want to take special lectures at academies during vacation. Even Chinese tourists who flock to plastic surgery villages such as Apgujeong in Seoul to undergo ‘Korean Wave plastic surgery’ are also in demand for ultra-short-term monthly rent.

So, why do landlords rent out ultra-short-term rentals? First, we need to take a closer look at the characteristics of ultra-short-term leases.

Ultra-short-term leases have a short contract period of one month. Instead, the deposit is very low or non-existent, and the monthly rent is higher than the market price. Typically, one month's rent is received as a deposit in advance. As long as there are no vacancies, you can earn higher rental profits by lowering the deposit and raising the monthly rent.

For example, a deposit 1000Monthly rent for 10,000 won 80Deposit for a studio apartment for 10,000 won 10010,000 won, monthly rent 100If you rent a short-term rental for 10,000 won, your monthly rent income will be 20It jumps by 10,000 won. If you calculate it excluding interest income, the monthly rent income for one year is 240It increases by 10,000 won.

An official from a real estate agent office in the Daechi-dong area said, “Among officetel owners in the Gangnam area, there are many investors who aim for high rents and insist on only ultra-short-term monthly rents.” He added, “Especially during the summer and winter vacation periods, when local and overseas students flock, there are cases where monthly rents are higher.” He said. If you rent a luxury apartment or penthouse like a hotel, the monthly rent can range into several million won.

Let's look at another example.

In the Sinchon area, Seodaemun-gu, Seoul 10Mr. Jin, who has been running a four-story one-room house for several years (60)Is 2014Since the summer of 2018, we have been renting it out for short periods of one to two months every vacation. There are a total of one bedrooms in this building. 12Private room. per room during the semester 45Receive a monthly rent of 10,000 won. If you rent for an ultra-short term during the vacation period, 50You can get 10,000 won. during vacation period 12Even if only two-thirds of the rooms are filled, the annual 135About 10,000 won (50,000 won)×9This means you can earn additional monthly rent (per room x 3 months per year).

Mr. Jin said, “This neighborhood is a university town, so there was a disadvantage in that demand for monthly rent only increased during the semester and dropped out during vacations. “Rather than renting an empty room anyway, you can reduce vacancy and increase returns by renting it out for a short period of time,” he said.

Ahn Min-seok, a researcher at FR Investment, said, “It is attractive to landlords because they can operate rental products flexibly while maximizing returns. At the same time, the advantage is that the tenant can use the residential facilities only for as long as necessary,” he explained. In fact, according to the real estate industry in the Gangnam area of Seoul, monthly rental properties are available in areas with abundant demand for ultra-short-term rentals such as academies, tourism, and business trips. 10Among the dogs 1~2Short-term rent without a deposit is quite common.

1~2If real estate that had been rented out on a yearly basis was converted into an ultra-short-term lease and the rate of return soared, wouldn't everyone jump at it?

Ultra-short-term rentals have many difficulties for an individual to operate alone. Above all, vacancy management is not easy.

For regular monthly rental properties, you sign a contract once. 1~2You can forget about it for years, but in short-term rentals, tenants change several times a year, so you can't just collect the monthly rent with peace of mind. In the case of Mr. Yu, introduced earlier, it was also one year. 12About two months out of every month, the space is vacant. If the deposit is low or non-existent and the tenant doesn't pay the rent, it can be a headache. For this reason, there are quite a few investors who pay a certain fee and entrust monthly rent management to a housing rental management company.

In addition to this, there are many things to watch out for when conducting an ultra-short-term rental business.

A typical example is a tenant who has signed a monthly rent contract for more than one year and re-rents while they are away from home. This usually happens in college areas where there are vacations, and student tenants seek out substitute tenants on their own. However, subletting at the tenant's discretion without the landlord's consent is strictly illegal.

“When a lessee (tenant) re-leases to someone else, the consent of the landlord (lessor) must be obtained. Subletting without the consent of the landlord does not receive legal protection. In order to prevent disputes, it is best to write a contract containing special terms and conditions before ultra-short-term rental or rental and have it notarized.” This is advice from Kim Hye-hyeon, director of R2 Korea.

▷▷Office also available for rent on a very short-term basis

Solve large building vacancies by renting on a monthly basis

Ultra-short-term rental business is not an investment method that only applies to housing. The short-term office rental market is growing overseas, including in European countries. 1990It has become common since the 1990s. Representative global office rental companies include ‘Central Walking’ in the UK and ‘Beta House’ in Germany. In Asia, the business of renting out offices for short periods of time is active in China, Singapore, India, and Hong Kong.

In Korea, ‘Serviced Office (Serviced office)' concept, the short-term office rental business is active.

A serviced office is a type of shared office, such as a reading room or study room, that is rented out on a monthly basis. Serviced office operation is carried out by a company renting an entire floor or floor, converting it into a small office, and then subletting it.

Serviced offices were first introduced in Korea. 2000Early 1990s. What began to appear one by one in the Gangnam business district of Seoul has recently spread to Jongno and Mapo, and is also increasing in local areas such as Busan Metropolitan City. According to the industry, sales offices operated in the form of small offices are located throughout the country. 1000Here and there. In particular, in Seoul, franchises such as 'Cocoon Peace', 'Fast Five', and 'Rehoboth' are also thriving.

Serviced offices were also introduced as a way to solve the problem of vacancy in large buildings. Jang Jin-taek, director of Remax Korea, explained, “In recent years, as the vacancy rate of large-scale offices has continued to rise, building owners have begun to lower the vacancy rate by recruiting multiple small-scale, short-term tenants rather than leaving space empty.”

[Reporter Jeong Da-un jeongdw@mk.co.kr / Photo: Reporter Kwan-sik Yoon]

[This article was published by Maekyung Economy1865like (2016.07.06~07.12Date) article]



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