New rental property & business plan/projections

[Cam W]

Hi all,

I was wondering how many of you have developed proper business plans, projections, reports, etc. when you were in the process of getting your property ready to rent. I am interested in getting some good advice on developing some reports, and was hoping to get some advice on what a reasonable booking projection is (how many days in season/out of season can I expect, realistically, to be occupied). General business questions...

I am interested in getting some dialog going to help me, and possibly others who are looking at purchasing property to rent, or who are looking to rent their current apt/flat.

Any help would be much appreciated!
CamW

[darcy]

In my opinion, average rental could not be expected to be occupied more then 60 days a year, or 16.5%. Of course Dubrovnik can do much higher as it is the prime Croatian destination, so I would be confident to almost double it. (Sorry, I have no references.)

However, problem with Croatian properties is there is no organized rental service that will offer consistent rental support. Apart from hotels, motels and camps (and big enough to employ full time staff) , whole of the Croatian industry is based on the individuals managing their own properties and only property marketing and bookings can be outsourced to some degree. I cannot understand why this is the case, but there probably is. I raised the same question few times on this forum and I have not received the response. (That is how it is.)

Another problem is local tourist price policy (always asking top dollar, even if that means loss of business). I do not see any governemnt support or intervention to subsidise eg. airfares or make an incentive to organize events and make tourist arival more attractive during the whole year. Again, Dubrovnik is an exception.

I will be happy to discuss this topic as well - I think this is very important for people purchasing their property/investment in Croatia with no or only a remote intention to live there one day or without a prime intention to sell and receive solid capital gain once Croatian property market is fully priced and run away.

[Cam W]

Darcy, Thanks for the response.

I don't think I mentioned it but I am in Dubrovnik, and I am lucky enough to have found a great apartment in the Old Town. It is located just off the stradun, in a very quiet area of the old town.

We are currenlty in the process of renovating and getting design ideas, but as I mentioned I wanted to get some ideas as to what to expect as far as revenue? What a fair price would be to charge? What to expect overall? I am not sure how many people on here actualy rent, but those who do, I would like to hear how you started up, what your expectations were, if any. Or did you all just do it blindly - haha.

Thanks,
CamW

[californiacro]

camw said:

Darcy, Thanks for the response.

I don't think I mentioned it but I am in Dubrovnik, and I am lucky enough to have found a great apartment in the Old Town. It is located just off the stradun, in a very quiet area of the old town.

We are currenlty in the process of renovating and getting design ideas, but as I mentioned I wanted to get some ideas as to what to expect as far as revenue? What a fair price would be to charge? What to expect overall? I am not sure how many people on here actualy rent, but those who do, I would like to hear how you started up, what your expectations were, if any. Or did you all just do it blindly - haha.

Thanks,
CamW

Have prices in Dubrovnik come down yet? The last time I looked it was still ridiculously high.... that was about a year ago. There has been talk that prices have dropped slightly... do you feel it has dropped?

[Cam W]

To be quite honest, one can get a different answer to your question, depending on who you ask. From what I hear, pricing has come down some, but not much. Maybe 5-10% overall, but that can change based on who you ask. As for myself, I am only beginning to look into what the competition is charging, but to be honest I can't find anything that is as nice as mine. Most look a bit worn, and dated. That said, my place will essentially be brand new on the inside when we are through with it, and I just can't find any others like that, that are for rent, and not sale. Again, I am still in the infancy of my research, but so far.

We will be just under 45m2, in the heart of Dubrovnik's old town, not outside the city walls, but inside. It will be a spacious 1 bed, 1 bath, that will sleep 5. Full kitchen with everything one would need. We are about 10 meters from a hole in the wall with water access and bathing platforms.

From what I am told by a few agents, I can get between 85 and 125 euro per night for my place. I don't want to price myself out of the market. I just want to be fair (yes I really said that). My thoughts are that the 125 is too high for season, as is 85 for off season. So I figure I will meet somewhere in the middle.

As far as I can find one would pay 90-110 euro per night for the same type of place, but it will be dated, and it may be in Pile, or Ploce - not inside the walls. All of the pictures that I have seen seemed nice, but have that "I have been used" feel. Or seem to be furnished with uded furniture, and not in an antiquey way. I know our place will get there, but initially we will start off with everything brand new.

[darcy]

I always tried to avoid using words "Business plan" and "Croatia" in the same sentence, it creates confusion and it is grammatically incorrect. ;-)

Croatian way to start is: move the one double bed in, fix the place a little bit (do not overspend) and ask for EUR100 (mid of your price range). Then see how you go and adjust as appropriate. Iterate as required.

Sorry, who will look after your apartment?