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New rental model
Jurgis Vilutis, director of the long-term lease management platform valdantis.lt, says in the program “Between the Four Walls” of “Žinių radijo” that today in Lithuania it is already possible not only to manage real estate, but also to provide assistance to those who want to buy a home.
“We have clients who haven’t even been to his apartment. They have only gone to a notary or at all only through the embassy have they signed a power of attorney to buy. This is the model that has come from Western countries, where property owners understand that they do not want to work on their properties, but simply to receive income ”, says the interlocutor.
Intermediary companies manage housing, that is, they communicate with tenants, neighbors, public service providers, solve various problems.
“There are several different directions of problems and they correspond to certain objects. We divide the objects into lower rents with a rent of up to 250 euros per month. In such cases, there are problems with the tenants themselves and in such cases we communicate with the neighbors. For example, parties, noise, anger between them. There is also a disregard for public services. Another segment: apartments from 350 to 500 euros, but more apartments of old construction. There are problems with repairs, furniture, plumbing, electricity and very often you have to react. We have several objects, to which we have to go 3-4 times a month ”, says J. Vilutis.
Brokeris NT
He goes on to say that the other part of the managed apartments are newly built luxury apartments, the rental price of which starts at 500 euros. The most expensive apartment managed by valdantis.lt – 2000 euros rent per month.
“These tenants are fickle. For example, we had a German tenant, a light bulb burned out and although the contract said he had to change himself, he called us and asked us to do it. We did it, we invoiced him, he paid, but it was important that he did not do it himself ”, says the interlocutor.
The tenant does not contact the landlord
When a rented house is managed by a company, in a sense it also assumes the responsibility of the tenant. The owners, according to J. Vilutis, generally do not know that they are renting their house and the tenants, whose apartment they are renting. Therefore, according to the interlocutor, in such cases, the mediator has the task of selecting a reliable resident.
“It is very important to choose a tenant, but we do not let him in, because we will need to communicate with him. In addition, one of the means of insuring and the simplest home insurance. We recommend insuring the owner of the property, and if the house is more expensive, we require the tenant to also take out liability insurance. We also request a deposit 2-3 months in advance. Then we monitor the situation, have a program and thus we can monitor various changes, including water consumption, and based on to that we can decide if there are parties or if a person lives alone ”, says J. Vilutis.
Who are the clients?
Who are the clients of these services? According to J. Vilutis, they can be divided into several categories. The main clients of the housing administration are the elderly, who doubt their own ability to communicate with tenants and solve problems related to the rental of housing.
“They will soon retire and think that they will no longer be able to take care of their apartment, they need someone to start looking after their home, which they rent to others. <...> The other part is those people who live outside the city or even the country where they rent the house. We have clients who live abroad, go there to work or we even had a client who went to travel the world. And those who are very busy are businessmen, mostly young people, ”says J. Vilutis.
Activity adjusted for coronavirus
This business model in Lithuania, like other segments, was affected by the pandemic and the coronavirus quarantine. First of all, according to J. Vilutis, in the spring of last year there were difficulties due to fluctuations in rental prices.
“A large mass of short-term rental housing has moved into the long-term rental segment. And those apartments are well equipped, in good locations around the house. And what happened? People panicked, allowed prices. For example, on the same staircase we rented an apartment for 500 euros, private owners rented another apartment for 350 euros. In fact, it was a difficult couple of months for us because we didn’t know what to do, beating the price we couldn’t. But we were lucky, we rented everything we had. And the second stage: daily work. We go to the apartments, we repair and maintain them, and the tenants live there. We have to constantly disinfect our clothes, carry guards, etc. ”, Says the interlocutor.
According to J. Vilutis, the intermediary company receives its benefit from the rent on commission: if the apartment is empty, the company does not receive a salary either. That is, according to the interlocutor, if the rental price is 600 euros per month, then the company keeps 10%. commission. It can be said that in such cases the rent to the tenant can be 10 percent. higher or owner will agree to 10 percent. deduct commissions from your possible rental income. On the other hand, if the tenant is late in paying the rent, the company pays the landlord the amount of the rent and continues to wait for the tenant to receive it.
Hear more about the radio news show “Between the Four Walls” HERE.
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