The rules, the guidelines to sustain and survive the ‘rental stay’ business…
Making the space available to stay or providing a roof over someone’s head takes a lot more than handing over of those room keys. Yes, we are talking about the rental aka the hostel accommodation. It is the transient address of a student, working professional or even a nomad traveler looking forward to resting his head for two nights in a rented room!
Hostels are known to be the budget edifice or inns that offer bed, bread and beyond. Hostels are the primal choices for students, new-age professionals visiting from other cities to study, work or ones simply looking forward to tasting the life beyond staying with family.
Each city offers widespread options for hostel accommodation. Thanks to the growing need to fly the nest and a burning sense of building your destiny, students and working groups rely on this non-permanent accommodation. Needless to say, the hostel business is ever-evolving and profitable at its best !
A. The right location
The right location matters the most and how. Now, you may already own ready to move-in space/building that might make a perfect hostel accommodation, but, wait… stop making that imaginary hostel signboard already. Consider the most crucial point here i.e. the locality/area… Self- answer these common rental property questions:
· Is the building/property near the city?
· If the property is situated in-skirts, are transportation facilities available and feasible enough?
· The surrounding vicinity. Is it safe and human-friendly?
If you answer YES to all these questions, hurry!!! You have passed the pivotal ‘space test’ to run your rental business. If not, wait for the right opportunity and invest in such property that meets the basic expectations of the right location. because, believe it or not, no one wishes to stay in no man’s land!
i) The transportation facilities
As mentioned above, it’s crucial to check whether the road transportation is smooth sailing and feasible. As most of the hostel tenants are students and new working professionals, spending a lot of money on transport is not something they can afford to indulge in. So if your property is walking distance from nearby railway, bus/auto stand, then it’s safe to say that you will receive a lot of proposals/requests to stay in your hostel.
If the local transit seems like a far-reaching dream (meaning, the hostel property is far from the main/local roads), try offering transportation from your side. Co-partner with cab/auto/bike services.
ii)The dreaded competition
Remember, you are not the only one who has come up with this supreme idea of starting a hostel business. Countless others have tried and tested this ‘property’ water. Hence, it’s crucial to know who your competitors are and how to survive in this rental property business.
· Get to know the other hostels near your property. If they are not flooded in numbers, then it’s safe to pitch in your ‘hostel’ tent.
· And, if the chosen area has many sign-boards like hostel A, Hostel B and more; there is always another area. Let the property hunt be on!
· While it’s ok to get inspired by your competitors, don’t be a downright copycat. If a hostel A is offering games equipped recreational areas; there is no need to replicate the same. Be original. Create a meditation room instead. It’s a need of today’s hectic life.
B. The financing and permit matter
Before you think a chosen area will make the best one for your hostel, do check the local laws.
Many towns and cities have pre-requisite or designated zones reserved for hostels and other rental accommodations i.e. you are allowed to build the hostel or the same business only on those areas. Running one outside it is not allowed and can be declared as illegal.
· It’s better to find the property that meets with the ‘permit’ rules.
· Get to know the local government zoning laws beforehand. Search the same on the official government website or meet with the local head/zonal officer to get clarity.
· Apply for necessary permits the legal way (as per the local government law).
· Pay the fees and submit all the important documents (identity info, other eligibility details, if any). Remember, the processing of the same takes time. Have patience. You will an affirmation on the permit, provided you meet all the criteria.
C. The cost factor
Pay attention to the operating costs, the ones that keep the business running every day.
· Calculate the rent, basic utilities, and any other hidden expenses so that you have a clear idea over a business plan.
· Do add and include taxes to your estimated operating expenses.
· Don’t forget to sum up the essential costs i.e. construction money, permit fees, employee fees, etc. Add this all up and create a total cost/budget for your business.
D. Plan the space
Invest in a property that doesn’t need a lot of care-giving i.e. re-modeling or major construction work.
i) Look for the best
· Find the property that looks spacious enough to be called a hostel accommodation. If the place looks cramped up and congested, there is always another property.
· Any space you consider should be safe, secure and friendly for human habitat.
ii) Set up the room
· Design a shared/single room plan. Pre-decide on the no of occupants per room. If the room is medium size, allocate per room for max 3 to 4 people. Avoid overcrowding.
· Add basic room amenities. Bunk beds, bed linens (pillows, blankets and more), storage cupboards, etc make the room ready.
iii) The bathroom
· Hygiene matters the most if you wish to survive long enough in the hostel business.
· Consider building 1 bathroom for every 8 beds/occupants.
· Make sure the bathroom fittings are functional and running i.e. showers, toilets should be clean and functional.
· Consider offering toiletries to earn the brownie points.
iv) The food
· Provide a mess service. Students and working professionals mostly prefer to eat in the in-house mess facilities.
· Plan the food menu carefully. Give it a home twist. Change the menu periodically to add newness, keeping monotony at bay.
· Do listen to the suggestions and complaints received from the tenants.
v) The added ‘extras’
· Create a common recreational area where the tenants can play, relax and share friendly banter over a cup of tea.
· Think about providing a laundry facility. As hostel life is synonymous with a pile of unwashed clothes, with the handy laundry service facility, students/tenants can breathe a sigh of relief over ‘who will wash all these clothes’ dilemma.
· Provide locker facilities. Guests/tenants can then safely keep their valuables and personal belongings.
· Make a friendly connection with all your tenants. Remember, as a responsible owner, the tenants are bound to count on you. Be cordial and approachable.
E. Advertising aka promoting the hostel
. Create a website for your hostel. List all the essentials, pictures and everything a potential tenant wishes to know about hostel accommodation.
. Build a local connection. Let the nearby vicinity know about your business.
. Believe it or not but, the good old print advertising will always be helpful. Circulate the hostel pamphlet ads. Let it be interesting and clear-cut.
. Finally, create a striking hostel signboard. Make it look appealing so that the potential tenant would be interested enough to enter the hostel edifice!
Getting inspired to dive into the hostel business? Why wait then? Simply guard the above rules and in no time you will be the proud owner of one!