Expanding your property portfolio to include specialized properties can bring in big profits. Corporate housing is one of the most profitable types of rentals to manage, but it’s not the right market for everyone.
The stress of renting out fully furnished (and frequently turned over) apartments seems impossible to some landlords. Without the right tools, plans, and priorities, it can be a massive investment of time and money. With the proper knowledge and connections, however, corporate apartment rentals can generate huge returns.
Ready to learn how to rent to corporate housing clients and tenants? Get started with our simple, actionable guide today.
What exactly is corporate housing, and what does managing a corporate housing rental entail? Find everything you want to know about this type of rental is in today’s guide:
Corporate housing is a type of rental used for workers, employees, and executives who need a convenient homelike environment when traveling for work. Sometimes these properties are used for relocating employees who need time to settle in before they find more permanent housing.
Since this is temporary and transitory housing, corporate housing rentals are fully furnished to include furniture, housewares, utilities, amenities, cable, electronics, phone, water, and most anything else that might be needed. The idea is that visitors can arrive with their personal items and be comfortable staying for more than four weeks.
Corporate housing providers or landlords often rent corporate housing properties directly to companies. The company pays one all-inclusive fee that covers rent, utilities, furniture, and everything else in the unit. Most corporate housing rental contracts have a minimum contract period of 30 days.
Some luxury corporate housing options include additional services such as a cook, maid, laundry service, or other add-ons. The goal is to create an atmosphere that is truly a home away from home. Corporate housing offers an alternative to long-term hotel stays, which are not always an option, affordable, or comfortable.
Why do homeowners, landlords, and property managers find offering corporate housing rentals beneficial?
The enormous profit potential is the primary reason corporate rentals are added to an investment portfolio. These rentals bring in higher rent than standard, non-furnished rentals due to the increased investment, included amenities, and furnished status of the unit. Landlords make big profits when running rentals to corporate visitors.
Though this is a drawback for some landlords, many prefer short-term rental periods often seen with corporate housing. The average length of a corporate rental is just under two months, though sometimes a visitor will be there longer. The minimum period set on most corporate housing options is one month.
Short-term rentals allow landlords to try a new market or fill a vacancy without committing to a full-year contract. Plus, the rent and unit can be reviewed and inspected more frequently.
As mentioned, corporate housing rentals are very specific properties. The contracts accompanying these units are also particular, as they must cater to a unique situation beyond the scope of an unfurnished rental.
Here are some essential facts about corporate housing that you’ll find while working in this part of the rental industry:
Ready to invest in corporate housing? Follow along to learn how to get started with this unique type of rental property.
Connecting with a local corporate housing provider is a great way to get involved in this market. If this property management business exists in your area, they could be a great partner in developing your corporate housing properties.
Corporate housing providers familiarize themselves with the needs of corporate tenants locally, and their insight provides invaluable information about the wants and needs of potential tenants.
If you decide to work with a corporate housing provider rather than renting directly to individual companies, you will sign a lease for the property with the provider. The provider will then fill vacancies. You’ll still maintain your responsibilities as a landlord, but you’ll work directly with the housing provider rather than the tenant.
If you prefer to work with companies directly or cannot connect with local housing providers, it’s time to develop meaningful relationships. Corporate HR managers and executives provide connections to those who are traveling or responsible for organizing local employee housing. Make these connections to make filling vacancies easier.
You’ll need to do market research on your area to determine what property types work best as corporate housing. Are employees and traveling workers in the area living alone or with their families? Do they need to be able to bring their pets? Will they want dedicated office space at home?
Answering these questions is vital. You’ll also want to consider the property’s location related to the corporations and businesses bringing in employees. You might have trouble finding tenants if your properties aren’t conveniently located near the tenants’ workplaces.
Furnish the unit with home decor, furniture, appliances, electronics, and anything else the tenant may need to live comfortably. If you’re doing a trial run in the corporate housing sector, consider renting furniture before buying anything permanent. This will help you see what works and what doesn’t before going all in on this aspect of the investment.
Of course, you’ll need to prepare an entire rental contract for each tenant or the corporate housing provider managing the property. This contract should include all standard rental agreement terms in your leases and a few additions.
Be sure to add information about acceptable subletting, expectations for unit cleanliness and maintenance, rules about trash disposal, information on when inspections will be completed, and details about any security deposits you put in place. Anything specific to your corporate housing arrangement must be included in your lease.
What does it take to rent out corporate accommodations successfully? Learn from these expert tips on the subject.
Even though the property will undergo frequent guest changes, you still need to keep up with regular inspections. Do them more frequently. Determine how often to inspect the property and stick to it. Ensure you include this information in all rental contracts for corporate housing properties.
If you are working with a corporate housing provider, ensure they include inspection information in their guest rules. See these examples provided to NASA employees staying in corporate housing for an idea of what this might look like.
Don’t assume that every property will bring massive profits as corporate housing. Do market research and convert properties to corporate housing if you’re confident in their potential. The suitable properties can generate profits more than four times what a standard rental in the area does, but a miss can cause losses just as significant.
Consider what types of traveling employees come to your area and specialize your properties to fit their needs. For example, traveling nurses may come to your city often if you have specific demographics needing their services. Outfitting corporate housing to suit their needs could have significant profit potential.
Ensure that you do thorough cleaning and refreshing during turnover periods. Corporate housing clients don’t want to move into run-down, dirty units from previous tenancy periods. Investing in professional cleaning will boost long-term profits, so consider the importance of this type of investment.
Whether renting corporate accommodations to individual tenants or a corporate housing provider, you’ll need to conduct screening with the party who signs your rental agreement.
Individual tenants should be thoroughly screened according to your usual practices. Corporate housing providers should also be screened, and the rental contract should stipulate that they screen any tenants or companies who utilize your property.
Screening at these volumes can be hard work with corporate housing turnover rates. Utilize RentPrep’s screening tools to simplify your workflow. Check out our fast, effective, and accurate screening results in our package and pricing guide.
Do you still have more questions about renting out corporate housing? Follow along in these FAQs to learn more.
Suppose an apartment listing includes the terms “corporate,” “corporate housing,” or a similar version of these words. In that case, the listing is a fully furnished unit intended to be used as transitory accommodation for traveling workers. Military personnel, traveling nurses, corporate executives, and relocating employees often seek this type of housing rather than staying in a hotel for over two weeks.
Corporate accommodation is another way to refer to corporate housing. These terms both describe a type of property rented out fully furnished. Corporate housing tenants stay at the property temporarily in a home-like environment, which is more comfortable than an extended hotel stay.
Short-term vacation rentals are typically handled similarly to hotel rooms. Even though the environment is different, visitors pay a nightly fee and are expected to stay for a short period. Corporate housing typically requires a stay of at least 30 days, and the properties are often furnished with a focus on livability for this extended period.
Short-term vacation rentals have all the basics but may not include dedicated office space, expensive television, or a complete kitchen. On the other hand, most corporate housing options provide these amenities for both luxury and convenience. Of course, short-term and corporate housing is available at various price points, affecting how the rental is outfitted.
On the flip side, the financial benefits of corporate housing rentals are the drawbacks that prevent some landlords from entering this market.
Operating corporate housing rentals requires excellent marketing, which means that marketing expenses will increase. Even if you’re working with a corporate housing provider and do not need to find tenants directly, you must market and maintain your relationships with these providers.
Cleaning properties during and after tenancy periods incurs higher costs with corporate housing. Professional cleaning is a must; you may even offer a cleaning service for corporate tenants. This is expensive but attracts tenants while ensuring your property is appropriately maintained.
If you enter the luxury corporate housing market to attract executives and other high-end corporate clientele, you must offer luxury housing to match their expectations. This requires additional investment into style, furnishings, decor, appliances, bathrooms, etc. The returns can be incredible, but they won’t happen without substantial and potentially risky upfront investment.
Yes. Anytime you rent a property to an individual or company, you must follow Fair Housing Act laws. This means you cannot discriminate against applicants due to a protected class, such as age, gender, or race. Ensure you follow these laws closely as you make tenant selections.
Investing in corporate rental housing generates significant returns for some landlords, but that doesn’t mean it’s the right investment strategy for your business. Think about the following as you plan your next steps to grow your rental business:
Answer these questions honestly. As you work out your answers, you’ll quickly discover whether or not corporate housing makes sense for you. No doubt renting corporate housing has great potential — is it time to make this big investment?
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