Subscription housing: understand how it works!

Subscription housing has been one of the fastest-growing real estate market models in recent years, especially during the pandemic, when people's consumption habits and behavior have been significantly changed.

New housing needs have been discovered and intensified in the last year. We have noticed the importance of having more space to work from home, the search for a better quality of life, practicality in everyday life, among many other issues.

These points have become even more valued by those who have a more hectic routine, whether because they are used to traveling frequently for work, or even because of the overload of tasks at home.

With a routine like this, those who are still looking for an apartment to rent avoid anything that brings more bureaucracy and long processes.

The speed and simplicity of property rentals have become increasingly sought after by tenants, who have found exactly what they were looking for in subscription housing.

In an analogy, this model works like a large streaming catalog like Netflix. There are several options available on demand, so that tenants can choose the apartment they like best and start moving in quickly.

It is an option that has revolutionized the sector. It has even driven the emergence of several companies specializing in this model. If you are looking for a property to live in for a short period of time, you cannot miss it!

So, come with us and check out the topics that will be covered in this text:

• What is subscription housing?
• What is the difference between subscription housing and traditional rental housing?
• What are the advantages of subscription housing?
• Examples of subscription housing companies.

Happy reading!

What is subscription housing?

Subscription housing is an on-demand rental model. In other words, a service that makes apartments available for a short period of time and with greater ease than traditional rentals.

This practicality is the main characteristic that defines subscription housing. This is because it makes it easier not only to sign the rental contract for entry, but also to cancel it.

Therefore, the tenant who opts for this model does not need to worry about having to pay a fine for early departure, or even having to notify the owner in advance of their decision.

Also known as on-demand housing, it offers greater quality and freedom to tenants. After all, it allows anyone to live in a property for days, weeks or months. This, without having to deal with all the bureaucracy that usually involves renting apartments.

The power is completely in the hands of the residents. They decide where they want to live, for how long and how they prefer to pay.

To make things even easier, all of these properties are already completely renovated and furnished with everything tenants will need. Some even have options for pets.

It's no wonder that many people compare the subscription service to streaming platforms like Netflix. Simply choose the option that suits you best from a wide range of options.

What is the difference between subscription housing and traditional rental housing?

The main difference between subscription housing and a traditional contract is practicality. Both in terms of the simplicity of the rental process itself, with regard to bureaucracy, and in the exemption from several responsibilities that encompass a standard rental.

These are extremely important points that differentiate the two models. Therefore, we will understand each of them better to make it easier for you to choose between them.

How does subscription housing work?

Subscription housing is an on-demand service, so its contract has certain differences compared to traditional rentals.

In general, these documents usually have a minimum period of 30 days, and can be renewed after their expiration as many times as you want. Or, you can choose another apartment to live in if you are not satisfied with the place.

To provide this characteristic practicality, the agreement is made and finalized completely online. Payment options are also varied so that each person can choose what is best for them, from debit or credit cards, bank slips or transfers.

Another very important feature of subscription housing is that it does not require any type of rental guarantee. This is a great advantage, since tenants do not need to worry about finding a guarantor or having financial resources for a security deposit, for example.

Your contract is extremely simple, without requiring a series of documents or other bureaucracy that usually involves property rentals.

As for its value, it will depend a lot on several factors, from the time you will stay there to the size of the apartment and its location.

Furthermore, many options allow for the customization of the agreement to be signed. For example, the price may include cleaning, laundry, maintenance, and other services. The more customized the agreement, the higher the final price will be.

How does traditional property leasing work?

Traditional property rental, in turn, is completely different from subscription housing. All the items that are left aside in the other model, with a focus on the practicality of renting, are seen and required here by the Tenancy Law.

This law is largely responsible for determining the duties and rights of tenants and landlords, as well as the rules that must be followed when signing the rental agreement.

The document must be as complete as possible in order to provide security for everyone involved without harming anyone. In general, the main items that should not be left out of this agreement are:

• Term: a rental contract usually has a term of 30 months, but can be negotiated for shorter periods. In the case of subscription housing, this period is at least 30 days;
• Fine: serves as security for the landlord in case of termination of the rental agreement . It is applied when the tenant decides to leave the property before the agreed 30 months. Its value is calculated based on the following formula: Fine = (3 x rent value) ÷ months of contract x months remaining on the contract;
• Adjustment: a change in the rental value, which must be specified in the contract. Its value is calculated based on one of the inflation indexes available on the market, such as the IGPM, one of the most widely used today;
• Fee: it is very common for landlords to establish some fees or requirements when the tenant leaves, such as a fee for painting/renovating the property, for example.

Compared to subscription housing, traditional lease agreements usually require some form of rental guarantee. Whether it’s a guarantor, security deposit, or other, both parties should choose the option that works best for everyone.

However, there is also the possibility of opting for a lease without a guarantee . Instead, it involves an advance payment corresponding to a rental amount. This way, the owner is not harmed in terms of financial security.

There are several types of rentals available on the market, both in terms of time and the models to be chosen. Therefore, the rental value will also vary greatly, depending on each of these factors and, also, others such as the location of the property and the cost of living in the region.

What are the advantages of subscription housing?

There is no shortage of advantages when it comes to subscription housing. Among them, the biggest are, definitely, the reduced bureaucracy involved in renting the property, the greater practicality and flexibility in moving and, most importantly, the reduction in costs throughout the process.

These benefits are some of the most valued by many tenants, especially younger people such as students who, for the most part, do not have huge resources to spend on renting properties.

It is no wonder that they are the largest target audience for this housing model, as well as for other more financially viable options such as coliving. Which, in a way, also aim for the same principles of practicality and less bureaucracy in everyday life.

Let's learn more about each of these advantages.

Reduction of bureaucracy

The rental of properties involves several rules and procedures required by the Tenancy Law. Although these rules are essential to provide security for those involved, there is no denying the immense work involved in complying with each of these items.

For those who want to avoid these obligations, subscription housing is an excellent option. With it, tenants do not need to worry about fulfilling the housing period established in the contract to avoid paying the fine for terminating the contract.

Or even having to comply with the prior notice in the case of early departure, for example. Not to mention all the other procedures involving the need for a guarantee, property inspection, and many others.

Flexibility and practicality

Flexibility and practicality are the key words of the concept of subscription housing. Both are direct consequences of reducing bureaucracy in the rental process.

If you need a property to live in for a few weeks or months, you will definitely find several options that fit exactly what you need.

Once you find the ideal apartment, you can end the rental contract quickly and easily online. When you move out, you can also end the contract much more conveniently, without having to wait the 30-day notice period or pay a fine.

Its proposal is, precisely, to offer a rental model that eliminates all the obstacles and long processes involved in renting properties and that brings greater freedom to tenants.

It is no wonder that this is one of the main characteristics sought after by younger people. This was proven in a survey conducted by Projeto Moradia.

According to the data released, 82% of young people between the ages of 16 and 24 do not want to commit to financing their own home. Instead, 60% of people intend to live in different types of properties throughout their lives.

Furthermore, 63% prefer to rent with a flexible contract, rather than buying a property.

Cost reduction

The cost savings when opting for subscription housing are huge, mainly due to the fact that you do not need to use a rental guarantee to sign the contract.

In options such as a security deposit or insurance bond , tenants must have an additional amount of money to pay the landlord in advance. This way, the landlord will be financially supported in cases of early departure or other problems that may occur.

In this housing model, these requirements do not exist, much less the payment of fines or other fees that may be included in the rental agreement.

Even if the rent ends up being a little high, it is important to take these points into consideration.

Examples of Subscription Housing Companies

The demand for subscription housing services has been growing worldwide. In Brazil, the only company dedicated to this model, so far, is Housi .

Recently introduced to the market, its proposal is to change the traditional concept of the property rental market. To this end, it brings all the characteristics of this model, with a focus on practicality and housing flexibility for tenants.

All of this is 100% digital and bureaucracy-free. In addition to short-term rentals, the platform will also offer longer-term options through a monthly payment plan.

In an interview with Estadão , the company's CEO, Alexandre Frankel, stated that he created the company in order to remove all the weight and obligations of ownership. For him, a residence should be seen as a service, not as an asset.

“People no longer want to spend their entire lives in debt, paying for a property that may no longer meet their living needs over time. In 30 years, the average term of a home loan, people change jobs, get married, get divorced, and have children. Subscription housing gives people the flexibility to use a property that can accommodate these moments, in addition to being completely digital, without bureaucracy,” he explained to the portal.

Conclusion

Subscription housing is still a new model on the market. However, in such a short time, there has already been a huge interest in this type of rental. Especially among younger people who fit perfectly into their rental ideals.

If you are also looking for an option that offers greater flexibility in choice, practicality and less bureaucracy, be sure to learn more about the models available on the market.

Did you like this text? Then share it on social media and check out the other articles about property rentals that we have on our blog !

‍