Chapter 216 Pilot Long-term Rental Apartments
Lin Ruoyan thought that since she had come to Shanghai, she could actually consider the issue of long-term rental apartments and make arrangements in advance.
Compared to northern China, Shanghai's economy is more developed, attracting a significant number of migrant workers. Initially, they likely cannot afford to rent a unit in a respectable residential complex. They might consider sharing a home, or even simply living in a basement, whether it has windows or not, as long as it's convenient for transportation and low rent.
This shared living environment is uncomfortable and disrupts the lives of the regular families next door. You might have a family of three living in a two-bedroom apartment, but your neighbor has the same layout, but they've crammed eight bunk beds into it. Sixteen people, both men and women, are constantly coming and going, and there are all sorts of safety hazards associated with plumbing, electricity, and gas. The constant noise of doors opening and commotion is bound to cause all sorts of disputes.
Even if you live in the basement of a regular residential building, in a dark and damp place converted from a cubicle, with a bunch of electrical appliances connected by exposed wires and a gas stove for cooking, can ordinary residents living upstairs sleep peacefully?
However, in big cities, there are very few affordable apartments to choose from. Migrant workers sometimes have difficulty finding suitable housing even if they have money, and the demand for affordable and high-quality rental housing has always existed.
Products like long-term rental apartments, which bring similar customers together in the same building and do not interfere with other types of living patterns, will flourish sooner or later.
"Mr. Fang, the apartment buildings you mentioned actually have great potential. Especially in a megacity like Shanghai with a developed economy, if the location and the target population are well matched and the services are in place, it can really be done." Lin Ruoyan thought for a moment and expressed her thoughts seriously.
"I own a furniture factory in Guangdong Province. Many factories there don't have their own dormitories, so they rent village residential plots for their workers to build. On these plots, they often build four-, five-, or even six- or seven-story multi-story buildings, each with a bathroom. They then divide the buildings into dozens of smaller rooms and rent them out to migrant workers. Is that the kind of apartment you want to build?"
"The rents for those apartments aren't high. I want to build mid- to high-end apartments, targeting small business owners in relatively concentrated commercial areas, or young white-collar workers who have moved to the city's core." Fang Yue admitted, "I want to build single rooms with bathrooms. After all, for so many years studying, the dormitories on campus were all four-, six-, or even eight-person rooms. Now that I'm working and earning my own money, especially as a white-collar worker in an urban area, I want dignity and privacy. It doesn't make sense to share a room with others."
"That's absolutely true. But even in Shanghai's bustling, convenient areas, the rent for a single room is very high. Even if you share a large apartment, not every room has a bathroom. Many people can't bear to leave, so they just rent in the basement and wait until they save enough money to move to a better place."
Fang Yue sighed, "Yeah, I went to Hong Kong to see the bunk rooms. A large three-bedroom apartment could actually be divided into eighteen bunk rooms. But even if the indoor space is small, you can still do laundry, cook, and use the toilet."
Lin Ruoyan had seen photos of parlor rooms in the real world. They were five square meters, with a sliding toilet, a sink, and an induction cooktop. There was room for a washing machine and a small refrigerator. Above all that was a bed accessible by a ladder. This was commonly known as a "bed-over-bathroom" setup. Some people simply put a bed in the bathroom, covered it with a toilet lid, and used it as a nightstand. Sitting on the toilet, they could cook and wash clothes facing the sink, saving a chair.
Yet, this is already a decent single room with a bathroom. Most low-income workers live in caged houses with three floors, with only curtains for privacy and no sound insulation.
Cages like these are usually found in busy urban areas. They're about the size of a bed, surrounded by barbed wire. Over a dozen people share a single room, with several of them nestled within a single doorway, housing dozens of people. There might be a cooking area, but they're shared by dozens of people. The space inside the cage is like a coffin. With so much stuff, you're curled up in bed, unable to stretch your legs. Don't count on air conditioning; a small electric fan hanging from your bedside is a plus.
With such poor living conditions, the monthly rent is very expensive, which almost drains most of the income of the lower-level workers. The rest can only be used to buy food. There is no way to live, and they can only barely survive.
In Shanghai, there are already many shared apartments with bunk beds, but most people choose the cheaper basements. Unfortunately, due to various safety incidents, those basements will be cleared out in the next few years and no small hotels will be allowed to operate there.
Although Fang Yue sympathized with such people, she was doing business and always had to think about how to make money.
Some of the unsaleable spaces in the housing market where people have a strong demand, especially the second floors of shops along the street or the bicycle parking garages in the basements, have already been targeted by others. They will rent them out in their entirety, divide them into small cubicles and rent them out as apartments, charging by the day or week, with a reasonable deposit.
Many people can't afford better housing, not only because rent is high but also because they can't afford a deposit. Small hotels don't require a deposit, offer direct check-in, pay by the day, and even provide toiletries, meeting the needs of migrant workers.
More than a decade later, many newly white-collar workers in big cities are choosing to rent a budget hotel on a monthly basis, which is more cost-effective than renting a single room. Monthly rent is cheaper than daily rent, and someone will change the sheets and towels every day, so you don't have to worry about cleaning.
The only inconvenience is cooking and doing laundry. Singles rarely cook, so they can either go to a laundromat or, in warmer climates, hand-wash thin clothes. They've gradually abandoned traditional studios or small, one-bedroom apartments. The rent for formal living now exceeds their monthly income, yet their aesthetic standards and quality of life remain stubbornly high. Sharing rooms, partitioned apartments, and other similar spaces are unacceptable to them.
Lin Ruoyan remembered that Mengmeng and Chen Jun also mentioned the apartment matter in Boliviana, the national flower of South America. It might be more stable to set up a plan in China as early as possible rather than overseas.
At this point in the book, the term "long-term rental apartment" didn't exist. It was simply a product type that was different from the annual rental of ordinary residential properties, but not like the daily rental of hotels. She wanted to seize market share and launch a high-quality brand.
If Fang Yue wants to do it, can the two of them consider joining forces? Fang Yue has been building a brand in the field of newly renovated residential buildings, and her control over quality and cost is more sophisticated than Lin Ruoyan's.
Fang Yue was also considering whether she should partner with Lin Ruoyan to develop that type of apartment market. Her residential clientele was relatively young, and when they first arrived in big cities to make their living, renting was their first hurdle. From the moment they entered the workplace, they were exposed to her brand. When they became successful and had the money to buy a home, wouldn't her developments be their first choice for the basic housing they needed, especially for renovations?
Fang Yue also knew that her financial resources were limited, and she didn't have a hotel management team. Lin Ruoyan happened to be a perfect complement to her.
The two of them had a shared vision and hit it off, discussing a pilot project in a first-tier city. Lin Ruoyan considered training the homestay management team to specialize in long-term rental apartments and developing a new range of furniture products tailored to apartment needs. Fang Yue would handle everything else within the apartment, adding any funds she could to her budget, prioritizing asset-light operations.
Fang Yue immediately agreed and arranged for her staff to find a suitable project. Lin Ruoyan also asked Hua Mengmeng to select people from the hotel and B&B team.
In addition, Lin Ruoyan also had to develop online management software, which was assigned to the current head of the information department. After all, Hao Heshan had already taken on the responsibility of the technology company.
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