The apartment short term lease investor buys a property in an existing service apartment or under construction (VEFA) to rent it furnished. This service apartment will be managed by a professional called "operator" or "manager" with whom the apartment short term lease investor signs a commercial lease (as opposed to a conventional residential lease).
In accordance with the apartment short term lease contract established (the commercial lease) with the owner investor, the operator manages the service apartment where the property is located. There are different types of service apartment and apartment three bedroom sectors on the furnished rental market in Causeway Bay such as student apartment three bedroom type of service apartment units, tourist type of service apartment units, senior type of service apartment units or EPHADs.
Definition Of A Service Apartment
These apartment three bedroom options are several furnished accommodations intended to be rented to a targeted clientele (elderly people in Happy Valley, students, tourists for example). These long term lease apartment accommodations in Happy Valley are all within a service apartment offering services adapted to the needs of the targeted clientele (clientele here means long term lease apartment end tenant, namely the tenant to whom the operator invoices rent): gym, swimming pool, concierge, hairdresser, manicure, library, Wi-Fi area, dining room, etc.
What Are The Advantages Of Investing In A Furnished Lmnp Rental?
Advantageous Taxation
Thanks to the long term lease apartment status of Non-Professional Furnished Lessor, the investor can take advantage of the ARD mechanism, or Deemed Deferred Amortisation. Apartment O Rental income is not considered as pet friendly serviced apartment property income unlike conventional rental. These Apartment O units are taxable income in the category of BIC (Industrial and Commercial Profits). BICs are taxable either at the Micro-BIC pet friendly serviced apartment or at the real simplified regime.
By pet friendly serviced apartment opting for the real simplified regime, the investor can depreciate the service apartment pet friendly value of his investment (including furniture) to calculate the taxable income. Generally, this annual amortisation allows the investor not to have to pay additional taxes for 20 to 25 years. Thus service apartment pet friendly making its investment in a service apartment a source of additional income totally tax-free.
No Management Constraints
Management is provided by a professional service apartment pet friendly operator who mainly ensures:
The lease apartment proper functioning of Apartment O services offered according to the type of service apartment (student, seniors or tourism)
the sustainability of the lease apartment activity
The lease apartment rental management of the service apartment (search for tenants, maintenance and management of repairs according to the conditions of the lease)
The Collection Of Rents
Thus, the one bedroom apartment investor will not have to undergo any management constraint. It is the operator who takes full responsibility for one bedroom apartment rental management. This service apartment agreement between the owner and the operator is formalised by a commercial lease pet friendly apartment, generally for 9 years, tacitly renewable on expiry.
Recovery And Carrying Of VAT
One of the big advantages of furnished one bedroom apartment rentals in service apartment units is the possibility for the investor to be able to recover (generally within 6 months) the VAT included in the rental price. Purchase pet friendly apartment.
Recovering VAT is possible if the service apartment offers 3 of the 4 services listed below:
Reception pet friendly apartment
Breakfast service Apartment O Causeway Bay
Household linen Apartment O Causeway Bay
Cleaning of Apartment O Causeway Bay accommodation
Important:
Recovering a furnished apartment is only possible within the framework of an acquisition in the new, i.e. an acquisition on plan (VEFA) or in a service apartment built less than 5 years ago. This furnished apartment is generally not the case when acquiring on the secondary market in Causeway Bay.
Example Of Vat Recovery
You are investing in a senior furnished apartment type of service apartment for an amount excluding notary and acquisition fees. This Hong Kong short term lease being in a service apartment with services, you declare as soon as you sign the deed a recoverable VAT which will be paid to you in full by the tax authorities at most 6 months after the Hong Kong short term lease keys to your good.
Please note that this VAT will only be totally “acquired Hong Kong short term lease” to you at the rate of one-twentieth per year, therefore after 20 years of ownership. If you resell your service apartment before, you will have to return part of this happy valley apartment sum collected.
Securing Income Through The Commercial
lease The commercial happy valley apartment lease establishes the rights and obligations for the investor, owner and operator of the service apartment. The happy valley apartment details in particular the periodicity of the rents (monthly, quarterly, half-yearly or annual) as well as the conditions of revision of the rent (ICC, IRL, ILC) and finally the serviced apartment hk island distribution of the charges as in a traditional type of service apartment lease.
This service apartment lease will in particular provide the owner with serviced apartment hk island rents net of all charges throughout the duration of the lease, whether the service apartment is rented or not.
The Duration Of The Commercial Lease
The serviced apartment hk island duration of the lease is set freely by the parties. A commercial lease is a lease whose minimum duration is 9 years with the possibility for the short term rental tenant to give notice at the end of a period of 3 years. We commonly speak of a 3/6/9 lease.
However, the short term rental law leaves great freedom to the parties to determine the duration of the lease. In general, in the context of a furnished short term rental in a service apartment, it is fixed for a firm period of 9 or 10 years. Without the possibility for the parties to put an end to it beforehand.
At the end of 9 or 10 years, the parties are free not to renew the lease. The pet friendly service apartment is up to them to inform, in the legal forms, the other party. If the lessor (= the Hong Kong owner) decides not to renew the pet friendly service apartment lease, he must pay an eviction indemnity to the operator in accordance with the calculation methods provided for in
Attractive Profitability
The pet friendly service apartment profitability net of management fees of the manager is generally between 4 and 5% of the amount of the investment (rent excluding hong kong island serviced apartment VAT compared to the purchase price excluding Hong Kong VAT).
The Censi-Bouvard Tax Reduction The
icing on the cake, the hong kong island serviced apartment investor can, under certain conditions, benefit from a tax reduction of up to 11% of the Hong Kong amount invested under the hong kong island serviced apartment option.
Disadvantages
In the event of temporary or long-term hotel pet friendly failure of the operator, the profitability of the investment could be impacted. At the time of renewal of the hotel pet friendly lease, the rent may be revised downwards at the hotel pet friendly request of the manager if his financial situation is degraded. He could also decide not to renew the lease.
In the event of resale, the investor is subject to changes in the real estate market in Causeway Bay. As with any real estate investment, whatever the device, neither the service apartment happy valley deadlines nor the service apartment happy valley selling price are guaranteed. As part of an off-plan acquisition, external hazards may delay the work and therefore the lease taking effect.
The Different Types Of Lmnp
service apartment units & Student service apartment units Small but functional, these service apartment units are optimised for student life. The service apartment happy valley has, for example, a studio for rent spaces for work, relaxation, a laundry service, etc.
This Sector Has Several Advantages:
Students stay longer (at least 10 months) than tenants from other studio for rent sectors
Demand is very strong, the studio for rent number of students continues to grow each year.
What Are The Main Selection Criteria For Investing In A Student Service Apartment?
A city recognized for its student dynamics (presence of many schools, evolution of the number of causeway bay service apartment students for example) Location of the service apartment (proximity to schools and universities) Presence in the vicinity of public transport and causeway bay service apartment network development projects
Senior Service Apartment Units
These service apartment units intended to accommodate independent people in Happy Valley must be secure and comfortable. The service apartment units generally vary from causeway bay service apartment studios to 3 rooms in houses or service apartment units.
service apartment units generally offer a pleasant setting with outdoor spaces and activities. Above all, these service apartment units make hong kong short term rental possible to reassure the occupants thanks to suitable staff and available medical care.
What Are The Main Selection Criteria For Investing In A Service Apartment?
The hong kong short term rental location: close to the city center facilitating access to activities and shops
Accessibility For Relatives
Organization of living hong kong short term rental spaces to promote conviviality between residents but also with and between visitors
Tourist
service apartment units These service apartment units are classified and studio apartment units operated on a permanent or seasonal basis. The studio apartment clientele targeted here is a leisure clientele who come to spend their holidays or a business clientele on a business trip. The tenant will therefore not take up a permanent studio apartment type of service apartment there.
These hk apartment accommodations generally offer the same services as a hotel (reception, cleaning, bed linen, etc.) with the difference that here the hk apartment tenants are independent (presence of a kitchen in their apartment).
It happens very frequently in tourist hk apartment type of service apartment units that the manager gives the owner the possibility of having his apartment available on certain contractually predefined dates (sometimes free of charge, sometimes after applying a reduction on the usual service apartment hk price).
What Are The Main Criteria For Choosing A Good Investment In A Tourist Type Of Service Apartment?
The service apartment hk environment: the location must benefit from tourist attractiveness such as the mountain (skiing in winter and hiking in summer), the sea or the service apartment hk ocean (very popular during the summer periods)
Competition: the tourist attractiveness of the area should not be the only criterion to be taken into account. The causeway bay hotel is also necessary to assess the competition in the surrounding area (hotels and other hotel-like causeway bay hotel type of service apartment units)