Yanzi Valley of Jingcheng

Chapter 227

From time to time, Ren Tianxing would be invited by Shen Li and Xiao Qianxing to their home for dinner. They had troubled Ren Tianxing when they moved house and received large packages.

Xiao Qianxing always laughed and complained, "I gave birth to two sons myself, and neither of them can help me at critical times. Xiao Ren is still reliable."

At the dinner table, the topic could not escape Guansha's long-term rental apartment.

In addition to rent spreads, another source of income for long-term rental apartments is value-added services, such as smart home, moving services, finance and insurance, new retail and other local services.

The existence of these services needs to be based on a premise, that is, the target customer group for long-term rental apartments must be of high quality, preferably young people who are well-educated. These young people have stable credit and high-frequency consumption needs. Compared with saving money, they prefer to enjoy life.

"I saw that many apartments had a lobby before. There is a rest area in the lobby. In the rest area, there are bar counter, table room, reading corner, billiard room and sofa, etc., allowing people in the community to rest together, and even have breakfast Provided." Ren Tianxing said.

Guan Sha at the dinner table stopped her chopsticks when she heard this, "I've thought about this before, and I went to see the location of the lobby with Sister Shen Li, such as the shops on the first floor that are not renovated and can't be rented out, but later I thought about it, is it really necessary?"

When Guan Sha stood in the empty space like a parking lot on the first floor of the Yanzigu residential building, she also imagined that the cement walls were painted with colors, and there was a stereo in the corner, one for sports and one for dining One area is the reading area...

The farmer’s houses around the new-style community in Yanzi Valley are full of people, and you can buy everything, except that none of the shops downstairs in the new-style community can be rented out, and even the movie theater that has opened before only supports 6 The month is closed.

At night, the only lights on downstairs in the community are express cabinets, KTV rooms and mobile libraries.

Guan Sha has long set her sights on these long-term vacant shops. Their existence is so embarrassing that some local developers on the first floor have not even installed partition walls. Only the necessary load-bearing columns stand alone one by one. Some of the shops on the upper floor still have glass doors, but Guan Sha has never seen anyone moving inside.

The rent of these shops is naturally very cheap, because they cannot be rented out at all, but when Guan Sha returned home and lay on the bed after thinking carefully, she thought that there was no way out to imitate the previous model of long-term rental apartments, because these seemed like a home. The community model is not what she, who is also a tenant, really needs.

Guan Sha asked herself:
"When you come back from a tiring day, if your home is in Building 3, would you go to the public lounge area downstairs to read books? Or just open the mobile app to read? Or go to the mobile library downstairs to borrow? Yu's second-hand books are very cheap, why not just buy a few and read them at home?"

"There is a bar, but there is no one. Do I think the apartment is not good? Compared with the bar, do I need services such as cleaning and moving more?"

Guan Sha remembered that when she was studying in the United States, the halls in the long-term rental apartment were also the least frequently used. In contrast, there were many more people in the gym.

But now that the epidemic has not passed, even if the gym is set up, will everyone really dare to go?

Or even if there is no epidemic, will the clustered fitness model still be the future trend?Or in the future, coaches will broadcast live online, check in online, or use the app's recorded courses to exercise at home at any time?

Guan Sha thought for a long time, and the deeper she thought, the less interested she was in those seemingly wasted shops.

Renting shops to build public entertainment venues actually only costs money, does not generate much income, and is not a place to meet the real needs of tenants.

In other words, in Guan Sha's view, the value-added service of community public space is actually a false demand, which cannot hit the pain points of customers.

"If I want to engage in value-added services, I want to engage in the kind that even I want." Guan Sha said to the crowd, "It's like if I am a manufacturer of products, the products I produce don't even want me. If it is useful, then why should I use it to become bigger and stronger?"

"That's right, those value-added services for those long-term rented apartments did not develop. The most profitable value-added service is rent loans." Ren Tianxing said.

"Well, but we definitely don't engage in rental loans." Guan Sha was categorical.

Xiao Qianxing put a rib in Guan Sha's bowl, "Then what do you want to do?"

"If you really want to talk about value-added services, I want to be a member of the reading app, fitness app, and English reading app, or give me some courses, such as financial statement analysis, workplace psychology analysis, EXCEL or programming courses."

"It can also be voice training, audio books, PS or video clips?" Shen Li asked while eating.

"Yes!" Guan Sha immediately echoed, "That's it. Of course, there are also laundry services, second-hand transactions, pet boarding or dog walking services. I see a lot of dogs in the community."

"Uh... do you want to do all these things?" Ren Tianxing asked.

"This is just a preliminary idea." Guan Sha kept stirring the rice in the bowl with her chopsticks.

Shen Li was curious, "If we do all of them, do we have enough money now?"

"Definitely not enough." Guan Sha and Ren Tianxing almost spoke in unison.

They both know that this kind of value-added service can only be realized when the number of members reaches a certain level. After all, the wool comes from the sheep. If you buy an annual membership card for a reading app worth 298 yuan, if the 298 yuan is paid by the tenant , the tenant doesn’t need to choose Guansha’s apartment at all, he can just rent a house and buy a membership by himself.

If such value-added services want to get more favorable prices, they must expand the scale. When the scale reaches a certain level, the capital efficiency will have the opportunity to achieve multiple growth. That is, the premise of refined operations must first achieve diversified expansion.

For long-term rental apartments, without sufficient scale, there will be no considerable profits.

The example of EQR company that Guan Sha studied before is the best proof.

EQR (Equity Residential), a well-known long-term rental apartment company in the United States, was established in 1969. It is positioned to acquire, develop and manage high-quality apartments. change.

EQR's housing resources are mostly concentrated in areas with good locations and strong demand, so as to obtain more income from asset appreciation, and seek opportunities for low-priced acquisitions in the market to continuously replace assets.In this way, you can enjoy investment income; at the same time, you can dynamically increase rental income, reduce operating costs, and increase rental profit margins.

As of the end of the third quarter of 2020, EQR managed assets of US$206.24 billion, liabilities of only US$95.76 billion, and net profit of US$6.61 million.

Guan Sha believes that as long as the pioneering and expansion period can be broken through, the business model of long-term rental apartments will definitely be able to come out, but it is a pity that the previous long-term rental apartments have taken crooked ways in order to expand, and the capital behind them has limited ability and endurance. As a result, no company has succeeded so far.

(End of this chapter)