Research On The Risk Control Design Of The Long-term Rental Apartment Business

Since 1993,when China opened the era of commodity housing,the real estate industry has moved from the "golden era" to the "silver era".As China's urbanization and the number of urban migrants are getting larger,the house rental business has become more and more prosperous.This has led to another important segment of the real estate industry,the long-term rental apartment business.A long-term rental apartment is a rented apartment managed by an institution.The term of the lease period is usually at least six months.The business models of long-term lease apartments can be divided into heavy asset management model and light asset operation model from the perspective of asset allocation.Under the heavy asset model,the company acquires the ownership of the assets through acquisition and/or self-building.After the renovation,the company leases the assets.The company has the ownership of assets and the right to operate.Under the light asset model,an enterprise enters into a lease with the owner of the asset(landlord)and obtains the asset's franchise within a certain period of time.During the term of the lease,the company can rent rental apartments from the outside,and the rent minus the rent paid to the landlord is the actual rental income earned by the company.At this time,the company has no ownership of the asset management right.In the risk control of long-term rental apartment business,effective risk control will help enterprises engaged in long-term rental apartment business to strengthen project risk management,regulate rationally and control the budget of funds,control project costs,reduce fraud,and build a healthy enterprise management system.However,there are currently the following risks in China:a single model makes only a small profit point;limited financing channels;cultivation stage,lack of brand premium;lack of professionals.These are just the tip of the iceberg of potential risks in long-term rental apartment business.With the release of the enterprise risk management framework and the subsequent revision and update,different industries have improved their own risk management design accordingly.As a brandnew business,long-term rental apartment business can deal with the uncertainties faced by operating activities much more effectively if it can make use of the new risk management framework to manage the risks of different operating models.This is also the most direct significance of this topic for reality.This paper selects two typical cases of EQR in the United States and Leopalace21 in Japan.It uses the methods of case analysis and comparative analysis to write,and finds out the similarities and differences in risk control of long-term rental apartment companies under different asset allocation models and analyzes them.Based on the reasons,this was used as a basis to derive the comparative analysis of the two cases and their implications and suggestions for the current development of long-term rental apartments in China.