The real estate world is changing at a fast pace, driven by strong demand for more flexible rental assets. As part of the new opportunities, holiday homes have emerged as an alternative model for lucrative property deals.
Holiday homes give an additional advantage much needed in today’s real estate markets, particularly in the UAE which believes in the philosophy of constantly adopting new changes in a highly competitive market. However, as with every new change, the introduction of holiday homes has also posed some questions for developers.
Earlier, developers only had to deal with owners, brokers and owners associations (OAs). In recent times, the holiday home operator is a new stakeholder that the developers need to come to terms with.
Some developers have done a great job by reinforcing the relationship with holiday home operators. In doing so, they have not only ensured that the building is well managed and maintained, but also made sure that residents have to pay lower fees, resulting in a long-term relationship with current tenants.
However, just like every coin has two sides, a few have hindered their relationship with holiday home management companies, resulting in negativity and pessimism. In addition, some developers have also created their own vacation rental management companies, which is a great alternative to keep the competition on their toes. But it is also creating a conflict of interest.
Having said that, developers are realising that holiday homes are going to a part of their customer portfolio. By working together on a do’s and don’ts list will not only help them create a harmonious environment, it will also lead to increased profits.
By resetting and looking at holiday home management companies as partners rather than competitors, developers can attract a certain type of new investor, one who provides for a new generation of tenants who live on a “subscription and pay as you use” model.
We have seen it in the car industry and globally seen it in the residential space. Why rent the same place for a year when you can spend the winter at the beach and the summer closer to the malls. Or even better, imagine living where your mood takes you.
It is therefore recommended that both developers and holiday home operators work in conjunction, and do everything in their power to help forge positive relationships. In today’s time, holiday home operators are like the glue that solidifies the relationship and maintains it. So, the development of long-term relationships with them and their tenants is essential to the success of any developer.
Vinayak Mahtani is CEO of bnbme, a holiday home management company.