Our article about investing in corporate housing discussed the financial aspects of investing in a corporate housing rental property. Now I’d like to address some important considerations to make when purchasing a property specifically for use as a corporate housing rental.
Price per bed not price per square footage. While some people think more space or a bonus room are great perks for a home they are going to live in, keep in mind that it’s just added liability for a home you plan to rent. Purchase the smallest square footage with the most number of bedrooms, because, like a hotel, when you rent out a corporate rental, it’s priced per bed, not by square footage.
Avoid first floor units. If you’re purchasing a condo as a rental property, it’s probably best to avoid first floor units. People who don’t know the city may not feel as safe in a first floor unit, and oftentimes people will use a first floor rental to advertise a business, like a fortune teller. It’s just best to avoid first floor units altogether.
Don’t rule out functionally obsolete. Sometimes a property makes a poor long-term home, but a perfect rental home. Homes with tiny closets or kitchens, which some consider functionally obsolete, make wonderful rental properties because they are usually really cheap to buy and cash-flow well. So don’t rule out those functionally obsolete properties if the objective is cash-flow and the price is right.
Location. Location. Location. Location can singly-handedly ensure your property is rented continuously. Look for homes in urban areas, near train stations and airports, and close to universities and hospitals. Those locations typically rent the best and have the best resale value too.
Views and amenities matter. When people are visiting a new city for business or pleasure, they want to enjoy all the city has to office. Corporate renters like city views, covered parking and free gym access. Keep these things in mind when creating a desirable corporate rental property.
This list should help you successful seek out a solid investment property that is specifically tailored as a corporate housing rental. Good luck!