Business Idea: Invest In A Serviced Office Business

I spoke to a customer of mine who is in the interior design business specialising in commercial and office interior design (those that involved space planning and office renovation over 1 or 2 floors of office space) and he remarked at seeing an increasing trend of serviced office providers.


Now as many of us know, one of the best businesses to be in is the “rental” or “leasing” business.

The  idea is simple, raise enough capital to cater to your customers and collect passive and recurring income.

For the serviced office business, the idea is to lease a big unit (or sometimes an entire floor of office space depending on how deep your pockets are) and sublet the smaller units to smaller startups or small established outfits.

If you have been running a small business say in the service industry (for e.g. accounting software, marketing agency etc), you know how difficult it is to sustain this type of business, essentially you have to:

1. Work out a marketing plan that generate sale leads for you consistently

2. Meet up with prospects and sell them your services. If you win a job, good. If you don’t, your marketing expense, time to pitch to your customers all go down the drain.

3. Project manage the jobs till the end

4. Manage customers expectations and bill them

5. Manage your cashflow (bad customers who do not pay on time are aplenty in the market)

6. Last but not least, juggle all of the above SIMULTANEOUSLY!

Have you any idea how difficult the above is? And the bottomline? Literally your financial bottomline – is to TURN A PROFIT.

The profit compensates you for the risks you take, the additional stress and resource management.

Now, let’s consider a serviced office business model

The biggest risk for you is to cough up enough money to:

1. Lease a big unit or a whole floor of space for you to sublet.

2. Invest in the partitions and meeting rooms and furniture

3. Market your location

4. Hire good staff (receptionist and office managers to run the entire place)

5. Get tenants in

6. Sit back, monitor your business (keep it at high occupancy rate just like a hotel)

7. Collect rental passively.

Of course I do not want to overly simply things as there are 2 sides to a coin, your risks include:

1. Lack of tenants which will cause you to bleed

2. Towards the end of your lease tenure with your landlord, you landlord might not renew your lease and there goes your rented premises (assuming you do not own the place)

Interesting observation

Now what I think is the real upside to the serviced office business is that it is fairly immune to the ups and downs of the market.

When the market is up, you have no worries of getting customers as people are starting up small businesses

When the marketing is down, people leave their jobs to start new businesses or small companies downsize and use serviced office space.

From the perspective of managing risks, the serviced office business model is good in my opinion.

Everything You Need To Know About Taking Out Home Mortgages

Going through the home mortgage process can be tricky which can lead to a very stressful time in your life. Buying a new home should be fun, but it’s not if you denied when trying to secure a mortgage. Don’t worry, the following article has good tips and ideas anyone can use as they prepare themselves for the home mortgage process.

Don’t be tempted to borrow the maximum amount for which you qualify. Your mortgage lender will not consider the extra expenses that may come up in your day-to-day life. Think about your other expenses and your lifestyle and make sure you can easily afford your monthly payment.

Know your credit score and keep unsavory mortgage lenders at bay. Some unscrupulous lenders will lie to you about your credit score, claiming it is lower than it actually is. They use this lie to justify charging you a higher interest rate on your mortgage. Knowing your credit score is protection from this fraud.


Check out our mortgage calculator here.

Don’t make any sudden moves with your credit during your mortgage process. If your mortgage is approved, your credit needs to stay put until closing. After a lender pulls up your credit and says you’re approved, that doesn’t mean it’s a done deal. Many lenders will pull your credit again just before the loan closes. Avoid doing anything that could impact your credit. Don’t close accounts or apply for new credit lines. Be sure to pay your bills on time and don’t finance new cars.

Make sure you look at multiple mortgage lenders before settling on one. You definitely need to do some comparison shopping. There are a lot of different mortgage rates and deals out there, so stopping at just one could really mean wasting thousands of dollars over the life of your mortgage.

Although using money given to you as a gift from relatives for your downpayment is legal, make sue to document that the money is a gift. The lending institution may require a written statement from the donor and documentation about when the deposit to your bank account was made. Have this documentation ready for your lender.

Talk to your friends for mortgage advice. Chances are that they will be able to give you advice about things that you should look out for. They may have a negative experience they learned from. You’ll learn more the more people you listen to.

If you are looking to buy any big ticket items, make sure that you wait until your loan has been closed. Buying large items may give the lender the idea that you are irresponsible and/or overextending yourself and they may worry about your ability to pay them back the money you are trying to borrow.

Pay more towards the principal every month that you can. You may be able to pay your mortgage off years ahead of schedule. For instance, you can decrease your loan’s term by about ten years just by paying 100 dollars more each month. Check out MAS Singapore website for regulations.

Don’t forget to calculate closing costs when applying for a mortgage, particularly if this is your first time. Above and beyond the down payment, numerous charges exist simply for processing the loan, and many are caught off guard by this. You should anticipate paying up to four percent of the mortgage value in total closing costs.

If you have filed for bankruptcy, you may have to wait two or three years before you qualify for a mortgage loan. However, you may end up paying higher interest rates. The best way to save money when buying a home after a bankruptcy is to have a large down payment.

Shop around when looking for a mortgage. Be certain that you shop various lenders. However, also make sure that you shop around among a number of brokers too. Doing both is the only way to make sure that you are scoring your best possible deal. Aim for comparing three to five of each.

So many people would like to purchase their dream home but end up not getting it because they didn’t understand what is needed to get a home mortgage. Don’t let that be you! Use the tips presented here as a springboard to helping you understand what it takes to get approved for a home mortgage.