During my sleepless days, I got super cool ideas. Of course, I don’t like it when I have to toss and turn for a long time and sleep doesn’t go, but in 80% of cases some super-genius ideas come to mind. I remember one of these very well. At a time when my neighbor was snoring a meter away from me in our hostel, I got the idea to buy apartments and rent them out by the day. At the same time, I did not limit myself to the idea of simply renting, I wanted to create airbnb or Booking , and this is back in 2014, when these portals were not yet so popular. Yes, I am not Brian Chesky or Joe Gebbia (the founders of Airbnb). But I had the idea of creating a whole portal. I even have original business plans for EAS grants that copy Airbnb's idea.
I told my snoring neighbor about my idea, who, as usual, said that it was nonsense. My parents also called it a crazy idea, who thought that drug addicts and prostitutes would become my clients and I would quickly stop doing it. Looking ahead to today in 2020, my parents are very active in daily property rentals.
I was ready to break my snoring friend when a month later he came to me and said that let's rent apartments by the day, completely forgetting that it was this idea that I proposed to him a month, or maybe two years ago. But it does not matter who and what proposed in the end, it is important that we began to do this.
How it all began?
We bought apartments on credit and rented them out by the day. How funny it was to take the first client. And how anxiously we had to watch near the house what was happening in the apartment. We rented an apartment for a week and it seemed to us that just the same, not the most favorable people. Therefore, they stood under the windows in the car, tracking down everything that was happening in the district. Thankfully, our fears were unfounded. And, indeed, in people's lives there are a lot of situations when a couple needs to rent an apartment for a week. To try to find a job, get a job, just visit the city and many other reasons.
Almost from the start, we got 3 apartments. This was a big plus, because a lot of things could be optimized. Also, how to save situations when we had booking slips.
income and seasonality
Work began quickly. We launched at the very beginning of the 2015 season and collected all the cream from the start. The business not only met all expectations, but exceeded them many times over. In the first 4 months, the average income from an apartment was about 1,4k euros per month. This cannot but rejoice, but it must be borne in mind that this is just income. From it it is necessary to subtract utilities, cleaning expenses, laundry, gasoline and consumables. But in the bottom line, it still came out about 800-900 euros clean.
But even here it is necessary to take into account the seasonality of the business. A huge tourist flow was in the summer months. But a lull began in September, and it was not possible to earn 1,4k. Then a new way was found: we found partners whose companies were very happy to rent apartments during the off-season, placing their engineers. It was a great combo. An aircraft maintenance company housed engineers with us between October and May. Giving us the opportunity to earn all year round. We took the season, and in the off-season there was an opportunity to take a break without losing profitability.
Our great business
Business development
After the first season with daily apartments, we have already taken serious preparatory steps for the next one. We were lucky in many ways, we did everything right at once and minimized the risk everywhere. And at the same time, in the off-season, we immediately concentrated on important areas. We started looking for new objects, optimized the site, immediately connected a system that synchronized various portals, including our site, found a good partner who solved the pain of cleaning. All this was greatly facilitated by the growing popularity of Airbnb and booking.com platforms. So next season we tripled our revenue. We were as prepared as possible for it. Everything worked great. We began to find and connect friends, partners and acquaintances to our processes. And they were really comfortable.
Rare Terminal
We were also lucky to get a terminal that booked a deposit remotely and withdrew money identically. Now it is practically impossible to get such a terminal, since it is very risky for banks, and they are trying, on the contrary, to take away such terminals from hoteliers. Terminals with remote withdrawal are usually received by large businesses. We were lucky that at that time a trainee girl was in charge of our processes (at the bank). And she agreed with all the requests, because she did not understand what we really wanted. And when she promised everything, she apparently received a hat on top. But the offer has already been sent to us. We were even contacted by a risk manager to explain to us all the nuances of the terminal. With a request to refuse it, but we knew what we wanted and insisted on it.
This is how we have grown to 14 sites all over Estonia. This turned out to be our maximum at some point in time. At the same time, 2 people were constantly employed in the business, + the partner company helped with cleaning. Plus, there were partners who dealt with objects on their own. At some point in time, it became clear that this was already our maximum efficiency. I must say that in business it is very important to have a good partner, if not a friend, who you can completely trust and rely on. I believe that it would be impossible to achieve such efficiency with anyone else. All this rested on the owners of the company.
First bells
The story would not be interesting if there were no problems in this successful business. And they were always all the way. They were even when we started to grow and seemed to effectively optimize processes. At some point, there were a lot of problems. And according to Murphy's rule, everyone fell at the same time.
Everything turned out very cool. We slowly grew, increased volumes, bought apartments, found new partners. Optimized processes and tried to act as efficiently as possible.
On the one hand, we were lucky, as I already mentioned, we were in the beginning or middle of the trend. There was a lack of supply in the market and a growing demand. It was possible to play with prices and catch surges in demand. At the same time asking for a higher rental price.
But everything was not so rosy. There were many different cases in which we had to act quickly and sometimes quite harshly. One such incident took place during the winter months. At one of our facilities, young guys had a real hardcore party, with the call of several patrol cars, the destruction of the house and other consequences of such massive parties.
How it happened
First I got a call from the owner that several squads had been called to our facility and that something was wrong there. I absolutely understood what the consequences could be and immediately prepared. Gathered all the friends who could join our house/facility check. Our guests rented a house for several days and immediately after the first day I received complaints. It was clear that no further house would be provided, unless it was some stupid mistake.
Equipped with a good company of young strong guys, we arrived at the place. All of our fears were justified immediately. The party was tough, the first interior door was on one hinge with a broken glass opening. A bunch of young inadequate bodies lying on the floor, a lot of garbage and broken-broken things. I will not go into details. Imagine all those American villa parties, it was the same, if not worse.
In general, the essence was clear. Guests must urgently-compulsorily leave the house. And the benefit of good friends provided a reliable escort of inadequate personalities outside the territory. Although it was not without complications, the guests turned out to be far from the best of the public, having criminal records and frozen accounts at such a young age. They also use the parent Toyota Land Cruser, but this did not prevent us from dispersing quite peacefully, just more persistently on our part.
Problems with daily rent of apartments/houses
Successful success was on the verge of collapse. Our guests ransacked our house. Yes, we managed to kick them out, but you should have seen the state in which we got the house. A hole shines in the wall on the street, the doors have fallen off the floor, there is a dent in the refrigerator from a blow (presumably from the head :)), in the center of the room there is a pile of obscure knee-high garbage, in general, you understand.
We did not pursue or sue the guys. What is the point of knocking something out of those who have arrested accounts and notes in red almost in every register? We took the deposit, handed out a couple of cuffs in the stomach when we were kicked out, but there was no point in doing anything else. In general, in business, you need to get used to the fact that you need to make a choice where to spend your time on a useless lawsuit with a 0 outcome or erase and forget the event and go on to earn money.
But what was difficult was to deal with the owner of the house and the house itself. We took all the fire upon ourselves and steadfastly withstood all subsequent events. We fixed the house, compensated for the breakdowns, and in the end, the owner was even satisfied and continued to work with us. For this, respect to me and my partner, that we managed to agree on everything and continue cooperation.
There were several such events, I even had to sue in one case. In another, stand at the entrance and wait for a person to find out why he wentuged the apartment.
Are you planning to rent an apartment? Then be prepared for these events in life.
Here is one example:
Several of our apartments were sublet. The partners were another firm that has a whole house with all the apartments. We rented 2 apartments from them (and about a year three apartments) for 3 years. Moreover, the conditions were spelled out in the contract that the landlord was aware that the apartments would be rented by the day and for this reason we paid a higher rent. Our rate was 510 euros for an apartment plus 410 for another one that was rented for a year. In total for 3 years we paid 41 640 euro to the lessor.
Now let's get to the problem. After 3 years of work, we decided to return the objects back to the lessor company, and due to the fact that the owner of one of the apartments changed, we transferred it to the new owner with whom we had no problems. With the apartment, which we had a year, there were no questions either. But an interesting story happened during the transfer of the latter. On the spot, my partner, together with a broker (representative of the company), examined the apartment. And the broker thoroughly checked every corner of it.
Inadequate inspection of the condition of the apartment
I found fault with small scuffs on the wallpaper, some things such as a teapot (?) and some table utensils, and the quality of the cleaning done. The partner threatened that he would not sign the act of acceptance and transfer, and the broker gave in on this, saying that, well, let's smooth things over. On the act, they nevertheless recorded at least that the apartment was not quite clean (which in fact was far from it) and both parties signed the transfer acceptance certificate and we were waiting for the transfer of the security deposit, which amounted to 550 euros.
The next day, the supply manager, you can’t call him anything else, having arrived at the facility, he pushed the refrigerator away and photographed the dust behind it. Photographed the dust under the sofa and photographed the mechanism of a cheap Polish sofa that was not functioning properly. And he sent us with a statement that, according to his new inspection and the identified shortcomings of collateral, we would not see what made us very angry.
Attempts to negotiate failed
Firstly, we fundamentally disagreed, the apartment was in use for 3 years, was stuffed with the cheapest Polish, if not worse things and furniture, and depreciated in 3 years. Everything worked and looked good. Despite this fact, we admitted that in 3 years something could really wear out, we are ready to pay 150 euros for the inconvenience caused. The side completely refused to somehow conduct a dialogue. We had a long correspondence with them, in which we first tried to peacefully explain the groundlessness of their actions. In the end, we had to threaten to send the information to the media. A day later, we suddenly received a letter, not from our former landlords, but from a law firm. It looked very dry and pretentious, the letter said that it would be better for us to calm down. And then the next dialogue will be in court, including for slander, which was not from the word at all.
We felt unfair. We learned that the apartment was rented out on the same day without additional cleaning to another tenant. For the sake of interest, we even dared to visit the same apartment, asking the new tenant to see it. No things were corrected, everything was handed over exactly the same as we handed over. Moreover, the tenant also had claims against this company, but this had nothing to do with our case. Our visit was authorized by the tenant and filmed.
We engaged a professional lawyer, he took over the entire case. We made a very simple thing that may be useful to you. Remember, you can send a preliminary application to the court with a petition for a dispute, which our lawyer did. It's not a trial yet. But the court has already registered the case and asks the party to respond to the claim. In our case, the party missed the dates and the process had to go to court after pressing the final button on our part.
Aftermath
But the next day, after the application was supposed to go to trial, this miracle lawyer of the opposite side sent us a request to end the process and wind down the case. They asked us not to apply our costs to them, and they are ready to pay everything that we are entitled to (550 euros in collateral). Thus, we returned 275 euros and safely gave 275 euros to my favorite lawyer.
Write your opinion in the comments and don't forget that we have many more articles!