The boarding house business is one of the right steps to start a business. Investments in property can bring promising returns and can be a source of passive income.
For those of you who have limited capital or are investing for the first time, the boarding house business is a promising way. Regarding business capital, you can choose easy and reliable loans as a solution if the funds you have are still minimal or insufficient.
With the help of funds from trusted loans, you can start a boarding house business without having to worry about a lack of business capital. Even in the midst of a pandemic, the boarding house business still has profitable business prospects because the number of people looking for a place to live is still relatively high, especially in strategic areas such as industrial areas, offices, or schools. Many of these nomads prefer to live in boarding houses rather than having to buy a house.
So, how much are the capital for a boarding house business, tips for running it, and other important things related to this business? Come on, see the full review in the following article!
1. Advantages of the Boarding House Business
The boarding house business is a valuable type of asset. The reason is, this business will not be empty of enthusiasts or eroded by time. Boarding houses, like houses and apartments, will continue to be in demand for the sake of human survival. Apart from that, this business also has other advantages which include the 6 profitable things below.
1.1 Lots of Devotees
Kosans that are in strategic locations such as close to office areas, schools, and industries with easy access will have a great chance to get a lot of tenants.
This is because many migrants from outside the area deliberately move to a place to get a more decent livelihood, such as studying and looking for the coffers of sustenance to make a living.
1.2 Promising Profits
The more strategic the location of the boarding house you have, the greater the profit you can get. Kosans that are in strategic locations is targeted by many people because of their ease of access to various public facilities. Not surprisingly, the price set for this area is somewhat more expensive when compared to other locations.
You also have the opportunity to get a higher capital rate each year, around 5% -15% depending on the current financial condition or inflation rate.
In addition, another contributing factor to the benefits is the facilities you offer. The more various facilities offered, the greater the amount of profit you can pocket. Tantalizing, isn't it?
1.3 As an Additional Source of Income / Passive Income
Many financial experts suggest having more than one source of income in order to minimize the negative effects of losing your main source of livelihood. The boarding house business is a suitable alternative for you to try, especially if you want to have additional income or passive income.
1.4 Management and Maintenance Costs Tend to be Easy
When compared to rented houses or apartments, boarding houses tend to be easier to manage. You only need to make a regular schedule to ensure that the existing facilities are maintained properly.
1.5 A Form of Property Investment that Has Minimal Risk
The shelter is one of the basic human needs. By starting a boarding house business, you don't have to worry about the business that you have is empty of enthusiasts. Because, the existence of a residence will always be needed from time to time, making this one business relevant, minimal risk, and one type of business that will never die.
1.6 Easy to Resell
The boarding house business is included in commercial property. This type of property tends to be preferred and therefore sells quickly if one day you have plans to sell it. Especially if the boarding house is in a strategic location and easy to reach.
2. Weaknesses of the boarding house business
The boarding house business does have lucrative advantages. Even so, it cannot be denied that this business also has weaknesses that you must consider. Here are 4 weaknesses in the boarding house business.
2.1 Good Management Skills Required
Like the business in general, the boarding house business also requires more attention. Especially if the boarding houses that you rent out are quite a lot and are equipped with supporting facilities such as private bathrooms, air conditioning, mattresses, and so on.
Managing a boarding house is very different from managing your own home. The reason is, you don't only take care of existing buildings or facilities, but you also have to pay attention to the security of all the residents of the boarding house.
2.2 There is A Risk of Late Paying Rent for the Boarding House
Apart from management skills, another problem that also haunts boarding house owners is the risk of late payments. This is influenced by various things, one of which is from an economic perspective. We certainly cannot force someone's circumstances and therefore a sense of tolerance must exist.
However, make sure the form of tolerance you provide can be clearly measured. Do not let you just let tenants pay late so that they can be arbitrary to the policies that you make.
2.3 Hard to Get Tenants
In building a boarding house, you have to consider the location and the facilities offered. If you just build, it's not impossible that your boarding house will be empty of tenants.
2.4 At the Risk of Being Used for Negative Things
In addition to the three things previously mentioned, the boarding house that you have is at risk of being used for negative things such as the headquarters of drug lords, terrorists, or prostitution. As a boarding house owner, there's nothing wrong with asking potential tenants about someone's status. Do they work in a company, are they still in college, and so on to ensure mutual safety.
3. How to Start a Boarding House Business
Ilustrasi Bisnis Kos-Kosan / Image Source: Pikiran Rakyat
First, you must ensure that the condition of the building that you want to use as a boarding house business is in good condition. If you don't have your own property yet, make sure that the property certificate and property condition are good. Don't let yourself spend too much money on renovations.
Another thing that is no less important is to ensure that the facilities you provide are complete and proper. This includes ensuring that the water sources in the area are in good condition. So, your customers will have no trouble doing their activities with complete facilities and clean water. Also, make sure that the location of the property you choose is strategic; for example close to offices, transportation centers, or campuses.
Also adjust the rental price with the facilities provided, along with the eligibility of the building and location. Don't let your rent be too high or too low. You can survey the surrounding locations to find out the average cost of renting boarding houses in the area.
To market your boarding houses, you can promote them online. Such as through social media or a special website for boarding houses that functions as a platform for boarding houses that brings together boarding house owners and seekers.
4. Estimation of Business Capital for Boarding Houses
As a first step in starting a boarding house business, you can start from a small-scale boarding house first. For example, running a 6-room boarding house. For manufacturing costs, you have to set aside around Rp. 40-60 million in the capital. As well as operational costs per month including the cost of water, electricity, and cleaning staff of around IDR 4-6 million.
In addition to boarding house business capital, you can apply for a trusted loan fund at BFI Finance. Simply by pledging the vehicle BPKB or house certificate, you can get liquid funds in less than a day. The loan ceiling that you get varies, starting from IDR 2 million. The tenor is also flexible, starting from 12-84 months for those of you who work as employees.
5. Things to Look For When Starting a Boarding House Business
To get a commensurate profit with a boarding room that is always full, you must implement a series of strategies to increase profits. Here are the things you need to pay attention to.
5.1 Try Your Own Building
The first thing you should pay attention to in the boarding house business is the availability of buildings. Make sure the boarding house that you have is on land that belongs to you personally. This is done to avoid land disputes or other problems.
Having a boarding house built on your own land will make it easier for you to take care of taxation and other matters related to administration.
5.2 Strategic Location of Boarding House
Whether or not a boarding house is crowded is heavily influenced by the location where the boarding house is located. If your boarding house is in a strategic location, of course, your chances of getting many tenants are even greater.
It's another case if you open a boarding house business in an area that is located quite far from industrial areas, offices, universities, or even schools with fairly limited access to vehicles. Of course, there are not so many fans.
The location of your boarding house can also affect market segmentation. For example, if you build a boarding house near a university, the majority of tenants are students from that campus. The price you need to give must also be adjusted again.
5.3 Prepare the Required Budget
After you determine the location of your boarding house, the next step is to prepare the budget needed. If you build from scratch, of course, the existing budget will be bigger than renovating the finished building.
In essence, you must adjust the existing budget with the capital you have, and don't forget to set aside a portion of the boarding house's income for maintenance costs.
5.4 Prioritize Cleanliness and Well Maintained Buildings
Not only the exterior and interior appearance, the cleanliness, and condition of a building play an important role in measuring the success of your boarding house business. Many people tend to choose a place that is clean and well-maintained because it feels more comfortable and safe.
Therefore, you should need to care for and maintain the boarding house that you have. One way is to employ one or two people to take care of your boarding house every day as well as being the caretaker of the boarding house.
5.5 Define Target Market
As previously mentioned, the location where the boarding house is built determines the target market that you will get. In addition, you can also narrow down the criteria for the tenant you want. For example, the boarding house that you have is specifically for women, men, or mixed boarding houses. Either way, every decision has its own consequences. Adjust the consequences that exist with your ability to manage them.
5.6 Pay Attention to the Boarding House Design
After you have succeeded in determining the chosen target market, the next thing that is no less important is choosing a boarding house design. The existing boarding house design includes the interior and exterior. This design must be adapted to the target market you choose. The design of men's boarding houses cannot be equated with women's boarding houses and vice versa.
The boarding house design that you choose also influences the facilities that you can offer later. Do the existing facilities include private bathrooms, electricity, water, and so on.
5.7 Engage in Marketing
A strategic boarding house location can indeed bring luck to the owner. However, if you balance it by diligently carrying out promotions or marketing strategies, of course, the results you will get will be maximized.
Currently, there are many ways you can do business promotion activities for boarding houses. Among other things, by following groups/communities on social media, collaborating with boarding house provider applications, or collaborating with traders or local residents to help promote your boarding house.
BFI friends, that's the discussion regarding the boarding house business. Interested in starting this one business? Come on, apply for a loan at BFI Finance and achieve your business success!
Borrow at BFI Finance. The process is fast and easy. Get a vehicle BPKB guarantee fund loan or a home disbursement certificate of up to 85% if the requirements are complete.
We are here to offer solutions and convenience for various financial problems. Among other things, business capital, children's education costs, to lifestyle.
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