Are you interested in starting a boarding house business? This is the right time! In 2023, the property rental business such as boarding houses is booming, especially in big cities, where many migrants are working or studying. Moreover, this business can also be a lucrative source of passive income. Just imagine, every month earning income from the rooms you rent out without having to work hard, who wouldn’t want to, right? However, it should be noted that being a boarding house owner cannot just build a building and then rent it out. There are things that must be considered before running this boarding house business. What are they? Here are tips and strategies for a safe and profitable boarding house business.
Overview of the Boarding House Business Opportunity
As mentioned, the boarding house business has a profitable potential, especially if you are able to maximize its potential with promising locations and facilities. The boarding house business is always in high demand. Considering that many workers and students are migrants from other regions. Of course, they definitely need a place to stay in the overseas land, and boarding houses are often the first choice. The boarding house business also has a much higher capital gain than other properties. In the world of property, capital gain means that the building has the potential to increase in price every year. Compared to the business of renting a house or vacant land, the boarding house business also has a higher capital rate of up to 5-7 percent. Of course, this capital rate must be supported by complete supporting facilities and worth it with the rental price applied.
Tips for Starting a Boarding House Business
There are a number of things to consider when you want to start a boarding house business. This is because you have to take care of a large building which is certainly not an easy thing and requires large capital. Here are some tips that you need to do before starting a boarding house business:
Choosing the Right Building
The most important thing about a boarding house business is the building. You can’t rent out a room if there’s no building. Not only that, you also have to recognize and pay attention to every detail of the building. An ideal building for a boarding house business must fulfill several key requirements, from having many standard-sized rooms to being located in a strategic area.
Build with a Contemporary Design
One of the tips for a successful boarding house business is to build a boarding house with an attractive and aesthetic design. Evidently, many contemporary boarding houses in big cities are always full. It is recommended to apply a residential design with a modern and minimalist concept. Don’t forget to equip the boarding house business with various supporting facilities such as a kitchen, parking lot, and yard to make residents more comfortable.
Choose a Strategic Location
Location is crucial for a boarding house business. Make sure your boarding house is strategically located, for example close to a number of public facilities. Launching from Biz Fluent, the average person rents a boarding room because of school, college, work, or temporary service. So make sure first which segmentation you want to pursue. If you want to target the student segment, make sure the location of the boarding house is near the campus. But if you are targeting the working class, make sure the location is close to the office center.
Rental Price in accordance with the Market
To run a successful boarding house business, you need to set a rental price that suits your target market. That’s why, before setting a fixed price, you can do research on competitor boarding houses first. This research includes facilities, building conditions, and location. If your building has more complete facilities, then you can set a higher price. Even so, still adjust to the rental prices around your location. If you do the wrong research, the boarding house might not sell because it’s too expensive.
Marketing a Boarding House Business
After all aspects have been considered, there are other important tips that should not be missed, namely marketing. Don’t let your building be empty because you lack marketing. Take it easy, marketing your boarding house nowadays is not too difficult. You can register your business on a boarding house or rental application. There may be a commission to be paid to the application, but the results are worth it.
Don’t forget about the legality of your boarding house business!
In addition to the five tips above, boarding house owners are also required to apply for a business license in order to obtain legality. Unfortunately, there are still many boarding house owners who ignore the legality aspect. As revealed by the Head of the Operations Section of the West Jakarta Civil Service Police Unit (Satpol PP) Sumardi Siringoringo, the majority of boarding house owners in West Jakarta do not have a Building Construction Permit (IMB) from the city government. To avoid being penalized, here are some legal documents needed to run a boarding house business:
Business Identification Number (NIB)
Every business actor is required to have a NIB as an identity, this also applies to boarding house entrepreneurs. The KBLI code that can be used is KBLI 55900 “Other Accommodation Providers” which covers the business activities of providing lodging services for a period of time that is not short, including the business of providing accommodation for a longer or temporary period either alone or shared rooms or dormitories for students, seasonal workers, and the like. For example:
- Student residence
- School dormitory
- Worker dormitory or hut
- Boarding house
Conformity of KKPR Space Utilization Activities
KKPR is used as a permit for the utilization of activities that are in accordance with the results of spatial planning that have been prepared by the Regional Spatial Planning Office (Article 1 PP 21/2021 concerning the Implementation of Spatial Planning). For example, before a boarding business will build its business in the DKI Jakarta area, first visit the One Stop Integrated Service (PTSP) or can check the spatial function through the Jakarta Satu website.
Building Approval (PBG) and Certificate of Functioning (SLF)
Currently PBG is used as a substitute for IMB, this license is given to the owner to build new, change, expand, reduce, and/or maintain the Building in accordance with the Building technical standards. Because basically, building buildings have their own functions including:
- Residential function, has the main function for human habitation;
- Religious function, has the main function as a place of worship;
- Business function, has the main function as a place to conduct business activities;
- Social and cultural function, has the main function as a place to conduct social and cultural activities;
- Special function, has special functions and criteria determined by the minister.
KH Contact
So, are you ready to start a boarding house business? Who knows, if the business is successful, you can become a boarding house owner and enjoy your old age.
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Therefore, there is nothing wrong with trying the five tips above and don’t forget to complete the legality of the business! To get started, you can first consult with Kontrak Hukum. Together with professional experts, you will get a free consultation on what and how the process or steps must be taken in running a boarding house business, including what legal documents are needed. Make running a boarding house business easy, safe and affordable by visiting the KH Services – Starting a Business page. If you have questions about other business needs, you can also contact us at Ask KH or send a direct message (DM) to Instagram @kontrakhukum.
