Watch for These Five Corporate Housing Rental Trends
Times change. Keeping up with today’s market forces can go a long way in determining your level of success as an owner in the corporate housing world.
The Supply and Demand for Short-Term Housing Will Remain On the Rise
As homes become more expensive to own and interest rates rise, demand increases for rentals. Overall demand for furnished housing continues to increase each year. Total revenues have risen to $3.2 billion, and that’s a 10.2% increase from two years ago. Generational trends could explain part of this rise. Millennials have become a larger part of the market, and they’ll be half the workforce by 2020. They’ve shown a desire (so far) to not be tied down by home ownership. Another possible cause is that as technology allows us to keep in touch from anywhere in the world, so our workforce has more mobility than it’s ever had before. Other possible ca
Even though more renters have flooded the market, there’s room for rent increases, as these haven’t kept pace. Average rents have increased 6.3% since 2015. One possible reason is that supply has increased to an all-time high of around 67,000 properties, spurred by an increase in residential construction of luxury homes and apartments. The supply increase still hasn’t kept up with the demand for corporate housing however, which makes up a full 20% of the temporary accommodation market, growing 11% in 2016 alone – at twice the rate of hotel demand.
There will be More Temporary Housing Demand in Tech and Healthcare
The pace of growth in technology has always been at breakneck speed; exceeding Moore’s Law and creating a high need for specialized and trained technology workers all over the country. This has been true for temporary placements or project workers, whose specialized expertise means getting sent to advise on projects regularly for thirty or more days. As a result, tech company staff has been one of the largest customers for furnished housing.
The other group that will continue to demand executive stay housing is Health Care workers. Aging boomers have flooded the market with demand for better and more specialized healthcare. Travel nursing is in high need, as detailed in previous articles, and that’s also expected to continue.
We’ll See More Non-Traditional Tenants
As corporate housing gets “on the radar” for more consumers, you can expect the types of tenants will grow. Corporate relocations, training trips, and temporary projects will continue to be popular, but also expect new categories such as:
* Expatriates. Many Americans working overseas, who no longer own a home in the U.S., return for summer during their children’s school vacations and stay for two to three months. 71% of Millennials have expressed a desire to work internationally at some point in their career;
* Seasonal travelers who are well-to-do in Ski Season or Surf Season looking for a convenient place to live while taking up a seasonal hobby;
* Emergency stays due to severe weather or family emergencies that displace individuals for more than thirty days; and
* Travelers with children, who don’t want to share a hotel room with the kids for a month or more, want to save on food costs, and provide a feeling of home.
More Self-Bookings Will Lead to Greater Customization
Data shows that around 69% of all tenants are self-booking. This number as steadily increased and it’s expected to continue to slowly rise. When an individual is booking their own executive stay, they can be much more focused in meeting specific needs. For example, choosing a location near a great summer school, or with a pool, or near a workout facility where they are members. Consumer demand for higher quality of life, even when it comes to temporary housing, will continue to affect the market.
Laws and Regulations Will Increase
Recent vacation rental law changes like “Primary Residence” laws and hotel taxes are dogging the holiday rental industry. These laws, passed in different cities nationwide, are in response to a variety of problems arising from vacationers such as trashed homes, misuse, and high turnovers lowering property values. Expect that some attention will come the way of corporate housing too, which is far better positioned to manage the demands of lawmakers and the HOA due to higher quality properties, stricter rules, and more responsible clients.
Landlords can best position their executive rentals by anticipating trends and changing their offerings and approach to meet them. Start with CHBO, who since 2006 has the most trusted source in the industry for great properties. List your property today by calling CHBO at 1-877-333-2426 to speak with a property specialist to answer all your advertising questions.