"Different from Hotels"... Reasons Behind the Popularity of Investment in Lifestyle Accommodation Facilities

Individual registration allows separate rental operation and use as a second house, highlighting advantages over condo hotels, drawing attention to residential lodging facilities

Living-type lodging facilities are gaining attention. This is because government regulations on housing products have been strengthened and the Bank of Korea's base interest rate has fallen, making them a niche investment product. Living-type lodging facilities can be rented out by individuals and can sometimes be used as a second house, making them popular investment products among younger generations.

Living-type lodging facilities are commonly known as "residences" and are residential facilities that can be built in commercial areas. Legally, they are lodging facilities defined under the Building Act and are classified as lodging facilities where cooking and laundry are possible according to the Enforcement Decree of the Public Health Control Act.

Although defined as lodging facilities, they differ from condominium hotels. Condominium hotels sold in recent years have been operated in a way that the entrusted management company distributes profits, so if the occupancy rate drops, the profitability is not guaranteed, and there have even been cases where investors suffered losses due to strikes by the entrusted management company. Also, individual registration is not possible, and it is difficult for individuals to use them as second houses.

On the other hand, living-type lodging facilities allow individual registration, so if the market price rises in the future, investors can enjoy capital gains through resale. Additionally, individuals can operate them as rental products, eliminating concerns about strikes by entrusted management companies. Furthermore, since the floor plans are designed like residential officetels, they can sometimes be used as second houses. Unlike hotels that operate only short-term rentals, long-term rentals like housing are possible, so they can also be operated as monthly or yearly rental products.

The advantages of these living-type lodging facilities are attracting not only retirees but also younger generations as appealing investment products. Unlike in the past, younger generations who value leisure activities have started enjoying various activities such as surfing, making these facilities useful as second houses and rental products that generate income.

A man in his 30s, Mr. A, who recently purchased a living-type lodging facility in Gangwon-do, said, "I like surfing and whenever I have time, I come down to Gangwon-do to surf, but the accommodation costs were considerable, so I started looking into living-type lodging facilities." He added, "I use it as a second house when I go surfing, and usually rent it out to others to earn rental income, so I am very satisfied."

As a result, living-type lodging facilities sometimes record high subscription competition rates. The 'Oceania Switchen Matie (800 units)' living-type lodging facility sold by KCC Construction in October last year at the Busan Osiria Tourist Complex recorded an average competition rate of 10.4 to 1 and a maximum of 18.2 to 1 at the time of sale, attracting great popularity.

Due to this popularity, attention is focused on living-type lodging facilities about to be sold.

‘Oceanstay Yangyang,’ entrusted to Korea Trust (with developer BLCO) in Dongsan-ri, Hyeonnam-myeon, Yangyang-gun, Gangwon-do, is scheduled for sale in June. ‘Oceanstay Yangyang’ is located right in front of Yangyang Dongsan Port Beach and is directly connected to Jukdo Beach. It is a living-type lodging facility with high rarity in the region, planned to be supplied with a total of 462 units ranging from 21㎡ to 49㎡ in size, from basement level 4 to ground level 20. ‘Oceanstay Yangyang’ offers quick access to Seoul and the metropolitan area via Donghae Expressway, Yeongdong Expressway, and National Route 7, and has a wide transportation network including the KTX Gyeonggang Line and Yangyang International Airport. The East-West High-Speed Railway connecting Chuncheon and Sokcho is scheduled to open in 2026, and development benefits such as Yangyang LF Square Mall and Namdaecheon circular train River Train are planned, making it a place with promising prospects.

Real estate experts said, "Since it is not subject to real estate regulations and the Bank of Korea recently lowered the base interest rate to 0.5%, it is an attractive product for investors looking for real estate investment products," adding, "Rather than blindly purchasing, since it is a rental product, investors should carefully examine the surrounding environment, the influx of tourists, and development prospects before investing."