RIO DE JANEIRO, BRAZIL – Picture renting an apartment where you need not be concerned with electricity, water, internet, and condominium bills: it is all included in a package paid monthly. No maintenance concerns either. If a light bulb burns out, the management will take care of its replacement. The property also comes equipped with the main furniture and appliances. Should you wish to relocate, there will be another similar property waiting for you at a new address.
This is the proposal of Vila 11, a company launching next month its first apartment building for rent in São Paulo. The development is located in Vila Madalena, near a subway stop, and offers apartments ranging from 32 to 66 square meters. All apartments will be for rent, at amounts between R$3,500 (US$700) and R$ 3,800 (excluding other expenses). Everything is administered by Vila 11.
“Our goal is to offer a professional rental solution so that the client will have a hassle-free home. There are great pains in the rental market, which is still very amateur and fragmented. Among them is the number of bills received,” says Ricardo Laham, the company’s president.
The company has R$1 billion to invest in the project and has now used 60 percent of the money. In its business model, the company buys the land, builds the complex, and manages the apartments‘ rental. In addition to the building about to be inaugurated, it has three more under construction in the neighborhoods of Pinheiros, Paraíso and Bela Vista, and six other projects in development.
The company expects to build 15 to 20 buildings in the city and have 3,000 apartments for rent within five years. Each year, Vila 11 expects to purchase three to four properties, which are projected to become buildings after three years.
Village 11 is owned by the Evergreen private investment fund, which currently has projects of this type in other countries such as the United States, the United Kingdom, Australia, and the Netherlands. In Brazil, the fund owns the Goodstorage storage company. The Vila 11 project has been under development since 2017 when the company began buying land throughout the city of São Paulo.
The principle driving Vila 11 is that it is often more worthwhile renting than buying a home. One of the arguments is that, with loan interest, buying a property often costs three times its initial price.
“Obviously, the real estate sales market will always be around. But for some people, rather than tie up their investment in an apartment, it may be better to use their rent to live and the other share to travel, for instance,” Laham says.
Once there are more developments in the city, the plan is for the company to offer quick options for residents who need to move to another neighborhood. “If they live in Vila Madalena and suddenly their life has changed, they have portability. We’ll have a building of a similar standard to offer and we can quickly relocate them from one place to another, based on the timing of their lives,” says the executive.
As it was not yet in operation, the company barely felt the impact of the pandemic. But the economic crisis may affect the demand for real estate, where rent is not particularly cheap. However, Laham says the company’s focus is on the long term and that, after the storm, the legacies of the present moment can actually help the business model.
“I believe that the pandemic will spur the search for well-being, by spending less time on displacement and having time for what matters,” he says.
Source: Exame