Malaysian End-To-End Property Management For Airbnb
In 2016, siblings Yap Zer Ken (Ken) and Yap Vin Li had a spare studio as part of their double key house in Kuchai Lama.
Dictionary time: A two-key apartment is an apartment divided into two apartments. The two units are generally self-contained and will consist of a bedroom, bathroom, kitchen and living space.
“We decided to test what this whole Airbnb thing was all about,” Ken said.
To their surprise, the property was booked the same day they registered. After a week of full bookings, the two decided to take the plunge and rent a property from KLCC to re-let to clients.
“As we started talking to our friends about what we were doing, they asked if we could also help them host their properties,” he said.
Before they knew it, they had a large number of announcements in their hands.
All of these units, however, were either unfurnished or not up to their standards. Thus, they worked on its interior fittings to refine them.
Build the foundation
“I think we were at a crossroads as to whether we want to do something big or not in 4 months,” said Ken.
Making a lot of money helping their friends, they knew if they got bigger they would have to invest everything in the business.
“Our main ah-ha moment was basically the fact that people kept looking for us to help them run their units and we knew we were on to something with the organic demand that we were having,” he says.
So they launched Plush Services, a property management company.
It aims to provide high quality homestays for guests and to facilitate accommodation for owners who have dormant properties.
Instead of outsourcing, Ken explained that everything from interior design to guest concierge is handled by their team of 42.
While it was more expensive to hire staff from the hospitality and maintenance industries, the siblings wanted more control over the quality they offered to customers.
What sets them apart from companies like Anthill Living, which focuses on renting rooms to students and working young adults, for example, is the way Plush Services chooses to list its properties as hotels on Airbnb.
They wanted to fill the gap in a market of homeowners who don’t have the time to look after their properties for short term rentals, like host families.
“Hosting basically requires a full team and because of that, owners and developers are unable to capture this potential revenue stream,” Ken said.
By the end of this year, Ken estimates that a total of 8,000-9,000 rooms would have been rented.
Most of their listings consist of individual owners with additional properties lying around.
“Recently we have been hired by more developers to manage their properties so that their unsold units receive guaranteed returns,” Ken said.
The cost of interior decoration of Plush Services is absorbed by the owners themselves. Ken said the team is price conscious so it doesn’t cost customers an arm and a leg.
It is also done so that owners can always get a good return on their investments; targeting an ROI of 4% to 5% for their customers.
Speaking of investments, the team has a few criteria for how they rate properties listed on Airbnb.
This involves looking at its location and the prices of their competitors.
From there, they’ll use a pricing algorithm to determine an optimized rate based on demand for an area.
“Usually, we take into account the occupancy of our closest competitors and the level of reservation of our units. Then we adjust our prices to find the best place to make the best returns for our clients, ”he said.
After deducting utility, cleaning and internet charges, Ken explained that Plush Services would take 30% of the total monthly profit earned.
Through this pricing structure, the company generated RM 10 million in revenue in 2019.
When the pandemic hit, those in the hotel industry suffered. And plush services too.
“We can see that bookings have dropped from 60% to 70%, even 80% in some places,” Ken said.
They have changed priorities to reduce costs within their company without letting go of their senior staff.
With reservations having taken a hit, the team is now focusing more on interior design projects and exploring other commercial revenue options.
They have now started a spin-off company called Kapas Living which focuses on selling linens, and have also partnered with HCK Group to manage their new co-living project.
- You can read more about plush services here.
- You can read more about other Malaysian startups here.
Featured Image Credit: Yap Zer Ken and Yap Vin Li, Co-Founders of Plush Services
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