Positive Reviews: Cross – border Players Revitalize the Long – term Rental Apartment Market, a Two – way Pursuit of Innovation and Segmented Demands
In recent years, the long – term rental apartment market has regained its vitality due to the concentrated entry of cross – border players. The community – based operation of Tiaohai Living, Xiaomi’s “Sci – fi Small Home”, Huawei’s talent apartments, and the participation of diverse entities such as Chow Tai Fook, local urban investment companies, and insurance funds have not only broken the single “second – landlord” model of the traditional rental market but also filled the gaps in segmented demands through differentiated positioning, promoting the in – depth transformation of the industry towards “products + services + ecosystem”.
Firstly, cross – border players reconstruct the rental scenarios with their “non – traditional genes”, activating the innovative vitality of the market. Traditional long – term rental apartments mainly focus on “space rental”, while Tiaohai Living combines pub culture with community operation. Through designs such as “screening like – minded neighbors through questionnaires” and “offsetting rent with part – time jobs”, it transforms the apartment into a “third social space for the youth”. In essence, it upgrades the “housing demand” to the “community identity demand”. This model precisely addresses the pain point of Generation Z, which is “finding like – minded people rather than just roommates”. Although the “mini – community” with 13 rooms is small, it verifies the feasibility of the “community premium” – tenants are willing to pay for the social value of “drinking, growing vegetables, and holding exhibitions together”, which is an emotional added value that traditional rental products can hardly provide.
Secondly, the “welfare – type rental” by technology giants and enterprises fills the market gap in talent housing, forming a multi – win ecosystem of “enterprise – talent – city”. Xiaomi Apartments offer fully – furnished rooms at a “rock – bottom price” of 1,999 yuan per month, and Huawei’s Xicen Apartments in Shanghai cover 50 – square – meter units at 2,000 – 3,000 yuan per month. Although it may seem “uneconomical”, it is actually a strategic investment by enterprises to attract and retain core talents. Data shows that Huawei’s Lianqiuhu R & D Center in Shanghai is expected to introduce 30,000 – 40,000 tech personnel. After the supporting 5,000 apartments are provided, employees’ commuting time is shortened and housing costs are reduced, directly enhancing talent stability. Xiaomi Apartments’ “blind – box marketing” and “smart home system” deeply integrate the brand’s characteristics (technology, youth) with tenants’ needs (cost – effectiveness, experience), which not only strengthens the corporate image but also lays the foundation for subsequent business (such as the promotion of smart home products). This “non – business – oriented” rental is essentially an extension of the enterprise ecosystem. Its dual benefits in social value (alleviating the housing pressure of new urban residents) and commercial value (talent stickiness) are advantages that traditional rental enterprises can hardly replicate.
Thirdly, the cross – border entry of diverse capital and entities promotes the professional transformation of the industry towards “asset management + operation”. Chow Tai Fook acquires heavy – asset projects through Chengjing Rental Group, insurance funds take over high – quality rental assets of real – estate enterprises at low prices, foreign capital and Ziroom establish an asset management platform, and local urban investment companies cooperate with professional operators to output management capabilities… These actions mark that the long – term rental apartment industry has entered the stage of “capital – driven and professional division of labor” from “wild growth”. For example, Ningbo Beilun Urban Investment and Lingyu International jointly established “Lunyu”. Lingyu is responsible for the full – process operation, and the urban investment company provides resource support. This not only solves the problem of the state – owned enterprise’s insufficient operation ability but also enables rapid expansion through the light – asset model. Insurance funds such as New China Life Insurance acquire Vanke’s POYU projects,看中的是租赁住房“长久期、低波动、现金流稳定”的特性，符合险资长期配置需求。This “capital + operation” division – of – labor model not only enhances the overall risk – resistance ability of the industry but also provides cooperation opportunities for small and medium – sized players to “hitch a ride”.
Negative Reviews: Hidden Worries under the Cross – border Craze – Triple Challenges of Profitability, Compliance, and Operation
Although the initial success of cross – border players has attracted much attention, the essence of the long – term rental apartment business is still a labor – intensive one that generates slow profits. From the underlying logic of the industry, if cross – border entrants cannot solve core problems such as difficult profitability, high compliance risks, and weak operation ability, the initial enthusiasm may turn into a short – lived bubble.
The most prominent problem is the profit dilemma. The “slight profit” or even “no profit” of long – term rental apartments is a well – recognized pain point in the industry, and cross – border players are no exception. Take Xiaomi Apartments as an example. The rent of private houses of the same area around Beijing is generally over 3,000 yuan per month, while Xiaomi’s pricing is 1,999 yuan per month. Industry insiders estimate that its cost may be close to or even exceed the rental income. Tiaohai Living’s trial scale of only 13 rooms has verified the attractiveness of the community model, but it is still unknown how to balance the public – area operation costs (such as rooftop maintenance and event organization) and rental income after expansion. Even for Huawei’s apartments, which are regarded as a “welfare”, employees have reported that “it is not cheap after considering comprehensive property, water, and electricity fees”. If the enterprise subsidy decreases in the future, it is questionable whether the rent will be competitive in the market. More importantly, there is a large amount of homogeneous supply in the current market (such as the overlap between affordable rental housing and market – oriented apartments). If enterprises only rely on low prices or marketing to attract tenants, they will eventually fall into a “price war”, further squeezing the profit margin.
Secondly, there is continuous high – pressure on compliance risks. The “wild growth” period of long – term rental apartments is over. Since 2020, various regions have successively introduced policies on fund supervision, restrictions on “converting non – residential to residential”, and fire and safety standards. Any compliance short – board may lead to project suspension or clearance. For example, some cross – border players may obtain housing sources through “converting non – residential to residential” (converting commercial or industrial buildings into rental housing) to reduce costs. However, such conversions need to meet hard requirements such as per – capita living area and fire – safety acceptance. A slight mistake may lead to the project being identified as illegal. Another example is that after the stricter control of rent loans, the light – asset model (such as leasing – and – subleasing) that relies on the “rent difference” for rolling expansion faces the risk of capital – chain rupture. The recent actions to rectify illegal partitioned apartments in many places have sounded the alarm: if cross – border players ignore compliance, their initial “beach – landing” may turn into a “mine – stepping”.
Finally, the short – board of operation ability is exposed. The core competitiveness of long – term rental apartments lies in “post – rental services”, but most cross – border players lack the genes of the real – estate or service industries and are prone to make mistakes in community management, tenant maintenance, and emergency response. For example, Tiaohai Living’s “shared kitchen rotation” and “vegetable – growing parties” require a continuous community operation team to maintain. Although the small – scale operation of 13 rooms can be managed manually, how to standardize it after expansion? Xiaomi Apartments’ “smart home system” is eye – catching, but the maintenance response efficiency after equipment failure and the stability of the smart system require professional team support. If cross – border enterprises such as Chow Tai Fook and Luzhou Laojiao only regard apartments as a “side business”, the lack of service genes may lead to a decline in tenant experience (such as untimely cleaning and delayed maintenance), ultimately damaging the brand reputation. In addition, the shortage of industry talents is prominent – excellent front – line operation talents such as housekeepers and store managers are scarce. If cross – border players cannot quickly build or hire professional teams, the operation quality will become a bottleneck for development.
Suggestions for Entrepreneurs: Precise Positioning, Compliance First, In – depth Operation, and Building a Moat in the “Long – distance Race”
Facing the “cross – border craze” in the long – term rental apartment market, entrepreneurs need to clearly recognize that this is a “long – distance race” that tests endurance, operation skills, and financial health. Based on the industry situation and cross – border cases, the following suggestions are worth considering:
Precisely position the segmented market to avoid homogeneous competition: The “blue ocean” of long – term rental apartments lies in the unmet segmented demands. Entrepreneurs need to lock in the target customer groups through data research (such as tenant profiles and regional industrial structures), such as young technicians in industrial parks, “new – city immigrants” from Internet companies, and Generation Z seeking cultural identity. The success of Tiaohai Living lies in “community screening”, and the advantage of Xiaomi Apartments is “technology + cost – effectiveness”. Entrepreneurs can learn from their “differentiated positioning” logic and avoid being consumed in the “price war” with affordable rental housing or traditional apartments. For example, for “working parents with children”, “child – friendly apartments” (equipped with children’s activity areas and childcare services) can be launched; for “freelancers”, “shared office + living” spaces can be created to build a competitive barrier through “precise demand matching”.
Balance compliance and innovation and plan risk – prevention measures in advance: Compliance is the “lifeline” of long – term rental apartments. Entrepreneurs need to study local policies in advance (such as the approval conditions for “converting non – residential to residential”, fund supervision requirements, and fire – safety standards) to avoid project suspension due to non – compliance. For example, if planning to convert commercial buildings into rental housing, entrepreneurs should consult the planning department in advance to confirm that the land nature allows it; if adopting the “rent – loan” model, they must strictly abide by the regulation of “rent pre – collection not exceeding three months”. In addition, cooperation with state – owned enterprises and professional operators can reduce compliance risks. Local urban investment companies have resources for affordable rental housing, and professional operators (such as Ziroom and Lingyu) have experience in compliant operation. Entrepreneurs can reduce trial – and – error costs through the “light – asset trusteeship” or “joint – venture” model.
Deeply cultivate operation ability and build a moat of “services + ecosystem”: The core of long – term rental apartments is “post – rental services”. Entrepreneurs need to shift from “emphasizing expansion” to “emphasizing single – store efficiency”. On the one hand, establish a standardized service system (such as 24 – hour maintenance response, regular community activities, and tenant feedback mechanisms) to improve tenant satisfaction and retention rate; on the other hand, build a “living ecosystem” based on their own resource advantages. For example, entrepreneurs with a technology background can embed a smart home system (such as Xiaomi’s “Xiaomi AI Speaker for temperature control”) to reduce energy consumption costs and turn the apartment into a “experience store” for smart home products. Entrepreneurs with a background in the alcohol industry or community operation can strengthen public – area activities (such as Tiaohai’s “pub living room”) to improve the space – utilization efficiency through alcohol sales and event fees. In addition, talent reserve should be emphasized. The team’s ability can be quickly improved through internal training (such as housekeeper service standards) or external recruitment (recruiting operation talents from leading operators).
Clarify the business positioning and explore a sustainable profit model: If the goal is a “business”, the profit model of “rental income – costs (housing acquisition, decoration, operation)” should be calculated to avoid blind low – price competition. If the positioning is “enterprise welfare” (such as Huawei and Xiaomi), the subsidy boundary should be clearly defined (such as limited to core employees and setting a lease – term limit) to prevent excessive welfare from causing financial pressure. In addition, diversified income from “rent + value – added services” can be explored. For example, paid services such as housekeeping, moving, and vocational training can be provided to tenants; cooperation with surrounding merchants (such as convenience stores and gyms) can be carried out to obtain a share of the profits; asset securitization can be achieved through REITs (Real Estate Investment Trusts) to revitalize the cash flow of heavy – asset projects.
The future pattern of the long – term rental apartment market will gradually become clear through the collision, integration, and reshuffle between cross – border forces and traditional players. For entrepreneurs, the issue of “being late or not” is no longer the core problem. Whether they can survive and evolve in the triple challenges of profitability, compliance, and operation is the real deciding factor. Only by anchoring the demand with “precise positioning”, avoiding risks with “compliance first”, and building a barrier with “in – depth operation” can they embark on a sustainable “long – distance race” in this “slow – profit – making” industry.
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