Millennial trio plans to profit off Malaysia properties they don't own. Is this an 'asset-light' rental loophole?

Maybe you person a concern idea, but that concern is excessively capital-intensive to get disconnected the crushed arsenic a solo entrepreneur.

An “asset-light” concern exemplary refers to entering into partnerships and outsourcing agreements to trim a business’s request to ain carnal assets.

Examples see Airbnb, which doesn’t ain its properties, arsenic good arsenic Uber, which doesn’t ain its cars.

Now, 3 millennials are adapting the asset-light exemplary to a tiny business, with plans to nett from “authentic” Malaysia properties they don’t own. But is this a astute concern determination oregon a risky hustle?

George Town successful Penang, Malaysia — a UNESCO World Heritage tract since 2008 — is renowned for its architecture, which blends Malay, Chinese, Indian and assemblage influences.

If you’re a tourer successful Penang, you tin present enactment successful 1 of George Town’s distinctive shophouses.

In 2023, Shane Low and his woman Chong Xin Pei, an architectural designer, started a spot improvement institution called Aayu Homes, according to Business Insider (1). A twelvemonth later, they were joined by Low’s puerility person Andy Ooi, who oversees regular operations and concern development. All 3 are 33 years old.

“We felt that whenever you travel, staying successful thing precise section is much authentic than staying successful high-end hotels,” Low told the work successful an nonfiction published Oct. 13. “We don’t ain immoderate properties; our exemplary is asset-light.”

Rather, they enactment with shophouse owners and investors to hole up the properties, astatine their ain cost, and past either rent them retired oregon assistance tally them, taking astir 30% of the revenue, reports Business Insider. The shophouse owners thin to beryllium locals oregon foreigners who bargain them arsenic aboriginal status properties, enactment determination erstwhile they’re successful municipality and rent them retired erstwhile they’re not.

So far, they negociate implicit a twelve properties, which are marketed done Airbnb and Booking.com, but they program to grow by adding much properties portion curating experiences specified arsenic the quality to publication cooking classes and walking tours.

“It becomes a full ecosystem,” Low said. “Not lone bash you person houses — you person everything that is section around, from experiences, to products and shops.”

As with each concern models, this 1 does bring immoderate risk. The practice quality of the homes means they mightiness travel with immoderate pitfalls, specified arsenic nary windows successful bedrooms and mediocre noise-proofing. If impermanent expectations aren’t handled properly, Aayu Homes risks reputational damage, which could depress aboriginal bookings.

If you’re considering a akin venture, it’s important to measure the risks archetypal and relationship for them successful your fiscal projections. For instance, these properties are successful a UNESCO practice area, and they whitethorn beryllium taxable to a big of regulations, peculiarly regarding alterations.