The Value of a concierge and added services

Aug 19, 2020

There is an increasing interest for apartments to let and rents have increased by 50% at least over the recent years, especially for those units that are attracted to foreign tenants. It is notable that recent experiences have shown that “high worth” tenants pay attention to the units that offer concierge services, either on spot, or through the landlord/his help. This is a somewhat new type of lets, something in between hotel accommodation and Airbnb. With the facilities now offered for online shopping etc., single, or young foreign couples find this service of interest.

A local luxurious apartment block in Nicosia as part of its administration offers as an option the following:

• Cleaning of the apartment (once a week or more) including cloth washing, the changing of linen, dish washing, window cleaning etc.
• They provide an online grocery shopping, through a specific supermarket (or option of 2-3) with home delivery, whereas fresh vegetables (Alion type) can be delivered at home within one day or earlier – fresh and top quality.
• A list of take away food of the Foody app, is most convenient again with home delivery with option of over 100 restaurants/take away business to choose from.
• A service for ironing, washing to be collected and delivered at home.
• Baby-sitting is another optional service.
• Party organizers of the Koullouros type (for traditional food) or by other organized caretakers/hotels, is most convenient with the provision of waiters and after cleaning.
• A taxi service including children’s schools is in place.
• Connection with a gym and including a personal trainer (at home or in the gym) is provided.
Etc.

Of course, all the above facilities provided are on a need to use basis and they are charged in addition to the normal common expenses and of course the rent.

A client of ours with an income of €300.000 p.a. expressed his satisfaction for this type of service by letting us know that “it is like living in a hotel, but it offers with better home facilities and at lower cost”.

International auditors, banks and other Cos offering services, having foreign clients is one source for a client provision, as are specialized website. Our neighbor at Protaras told us that “we arrived at our home and we then realized that we did not have vegetables, bread, potatoes etc. and with a telephone call we had the next day everything we wanted delivered at home”. This could be an added luxury for locals (be it most convenient) but for foreign tenants is more of a necessity having to find out where everything is. In the event of the landlord managing such a service (i.e. the provision of the phone/name etc.) but with some help provided to the tenant, the “management” fee for such a service is around €50 p.m.(+) and the landlord should not look at this as an added profit/income, but more of a facility provided in order to keep the tenant happy both in terms of rental payment and the duration of the stay. Tenants of such a caliber will appreciate from the landlord some sort of a “personal” care. By sending your tenant 2-3 halloumi, perhaps every now and then, local marmalade etc will do wonders. So, in such a case we send to a tenant 3 packets of local nuts (€10) which goes with his whisky and he reciprocated by sending us a huge package of Jordanian dates. So dear readers build up a personal relationship which helps (care by the landlord not to be pushy).

The target should be to have a return of around ±3% (rental income V value of the unit) notwithstanding that some greedy landlords are seeking over than 6% (not attainable over a long-term basis).

The rental market is affected (as well as other type of investments) by the overall economic situation of the country, which is now worrying if the attraction of Cyprus will remain after the upset of the double taxation agreement with Russia and now the state of the tourist industry (and its side effects).

So those who aim with high initial rental income must be prepared to have the cash to sustain the increased void periods and maintenance that new tenants will require (high rents cause a large turnover of tenants). Nothing is certain under the prevailing circumstances, so by providing added services to your tenant is one way to keep him happy, retain your rental income and secure his mid-term stay.
It is notable that such added service are provided by the Limassol towers and others, whose rental attraction is somewhat in difficulty – see vacant apartment buildings-no lights during the evening etc. which is indicative of the situation, whereas we have our doubts on the common expenses payment which might create cumulative problems in the future (bearing in mind our non-workable common expenses law).

The easy let period does not seem to have a continuation regarding foreign lets and this is one way to cover oneself for any unexpected changes.

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