Serviced apartments · Hospitality
Profit by unit for serviced apartments and managed stays
A serviced-apartment operator pays rent or a revenue share to many owners and earns from guests who stay a night or a year. We report profit unit by unit and reconcile what is owed to each owner. Corporate long-stay billing, deposits and recoveries are kept in step with the contracts behind them.
In one paragraph
The margin of a serviced-apartment, managed-stay or co-living operator is the gap between two sets of contracts that are rarely compared. Each unit carries its own owner agreement, and each stay carries its own commercial terms. Operators leasing or managing units from many owners usually turn over ₹5–200 crore, with a founder or finance head running the numbers.
Founder or head of finance, often with the head of supply who signs owner agreements
The economics
How the money moves in this trade
An operator takes units or whole buildings from owners on a fixed lease, a minimum guarantee, a revenue share or a management fee. It furnishes and services them, then lets them nightly through online channels, monthly to individuals, and on long-stay contracts to companies that house relocating or project staff. Revenue per unit varies sharply with the length of stay, while lease cost is fixed or tied to a formula the owner can audit.
Corporate long stays are billed monthly, often with consolidated invoices across several apartments and cities, and paid late. Security deposits are collected from guests and paid to owners, and electricity, maintenance and damage are recovered from one party and owed to another. The tax treatment of a stay also depends on its terms and length, which makes the contract wording a finance matter as well as a commercial one.
The problem
Where the numbers usually break down
Profit is reported for the portfolio, not the unit
A loss-making lease is hidden among profitable ones, and it renews on the same terms.
Owner payouts are calculated in spreadsheets
Revenue-share and minimum-guarantee payments to owners are worked out by hand each month, with errors found only when an owner complains.
Corporate billing lags the stay
Long-stay invoices are raised after month end and consolidated across cities, so disputes and late payment are built in.
Deposits on both sides are not tracked
Deposits paid to owners and held from guests sit in general ledgers without a register of who is owed what.
Recoveries fall between owner and guest
Electricity, society maintenance and damage charges are paid by the operator and not consistently recovered from either party.
What we do
The work, and the result each part produces
Unit-level profitability
Revenue, lease cost, housekeeping, utilities, furnishing depreciation and channel cost reported for every unit and building.
Every lease is judged against what it earns.
Owner payout reconciliation
Fixed rent, minimum guarantee and revenue-share payments calculated from the agreement and the unit's own revenue, with statements for each owner.
Owners are paid correctly and can see how.
Corporate long-stay billing
Monthly invoicing aligned to occupancy and contract rates, issued on a fixed date with supporting stay detail.
Corporate receivables are billed promptly and disputed less.
Deposit registers
Separate registers for deposits paid to owners and held from guests, reconciled to the ledger each month.
Deposit liabilities and claims are known by unit.
Utility and damage recovery
Utility, maintenance and damage charges tracked per unit and billed to the responsible party.
Recoverable costs are recovered rather than absorbed.
Stay-mix and channel analysis
Revenue per available unit by length of stay and channel, against the cost of servicing each mix.
Sales effort goes to the stays that pay best.
Where we start
The first steps of an engagement
Owner agreements and stay records
We ask for every owner agreement, stay records by unit from the property-management or booking system, corporate long-stay contracts and the deposit ledgers.
Recalculate last month's owner payouts
Payments to owners are recalculated from each agreement's structure and the unit's own revenue, and differences are listed owner by owner.
Deposit registers on both sides
Separate registers are opened for deposits paid to owners and deposits held from guests, and each is reconciled to the ledger.
Profit by unit and building
Revenue, lease cost, housekeeping, utilities, furnishing depreciation and channel cost for every unit, with loss-making leases identified before they renew.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Profit by unit and by building
- Revenue per available unit by stay length
- Owner payouts reconciled to agreements
- Corporate receivables ageing by client
- Deposits held and paid, reconciled to the ledger
- Utility and damage costs recovered against costs incurred
Who it suits
Written for, and not the right fit for
- You own and run a single building as a hotel; the hotel groups page fits better.
- You need a legal opinion on how your stays are classified for tax; that is given by an independent legal or tax professional.
- Serviced-apartment and managed-stay operators leasing units from multiple owners.
- Co-living operators with revenue-share or minimum-guarantee owner agreements.
- Operators with a large share of corporate long-stay contracts.
Services
Services this work draws on
Outsourced accounting
Your books kept current and reconciled, closed to a published calendar.
Explore service ↗Costing and profitability
What each product, line and customer really contributes.
Explore service ↗GST, TDS and tax compliance
GST, TDS and income-tax prepared from reconciled data, not a working file.
Explore service ↗MIS and financial planning
Reporting built around the questions you actually need answered.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
We have hundreds of owners on different agreements. Can payouts be systematised?
Yes. The agreements usually fall into a handful of structures. Once each owner is mapped to a structure and its parameters, the monthly payout becomes a calculation rather than a negotiation.
Does the length of a stay affect how we account for it?
It can affect billing, deposits and tax treatment, so stays are tagged by type from the start. Where the tax position turns on contract wording, we prepare the facts and you confirm the position with your tax adviser.
How should furnishing cost be allocated to units?
Furnishing is recorded against the unit it was bought for and depreciated over its useful life, so a unit's profit carries its own fit-out rather than a portfolio average.
Legal opinions on owner agreements or on the tax classification of stays are given by independent legal or tax professionals, and statutory audits are signed by an independently engaged CA. 5th Quadrant prepares the data and coordinates that work but does not sign it. Full detail is on our Professional Scope page.
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