10 Questions every realtor should be prepared to answer about corporate housing
Part II of III
If you’re a Realtor with an established real estate practice, chances are you have or will have a client who wants to buy an investment property. Helping these clients identify the right investment property is now in your hands. You don’t want to mess it up. What are you going to do?
4 – Who rents (prospective tenants) a corporate rental?
Corporate housing has been traditionally utilized by traveling business professionals who are staying in a city for one or more months at a time and relocated families in need of temporary housing in their new locale. However, today, corporate housing has become a popular lodging option for military families, traveling nurses, visiting professors, doctors, athletes, traveling theatre companies, individuals seeking medical care at a treatment facility outside of their housing area and displaced homeowners who are given temporary lodging by their insurance carrier when their home has been damaged.
5 – Where is the best place to buy a corporate rental?
Just like buying a primary home, investment real estate also requires thoughtful consideration of location, location, location. Choose areas for your clients that are located in or near city centers or near military basis, hospitals and treatment facilities and universities. Avoid buying in a touristy spots unless you want to attract vacation renters. Great cities for corporate housing (these are the top solicited corporate rental markets according to CorporateHousingbyOwner.com) include Atlanta, Chicago, San Francisco, Denver, Seattle, Toronto, San Diego, Dallas and Washington D.C. Review rate statistics and trends in the annual Corporate Housing Industry Report and the annual CHBO “by Owner” Report.
6 – How does a corporate rental differ from a vacation rental?
Vacation rentals are typically offered for nightly or weekly stays and are located in tourist hotspots like mountain and beach towns. Vacationers are more interested in perks like beach views and hot tubs, while corporate housing renters are more interested in access to freeways and proximity to city centers. Remember, location matters if you want to attract a corporate rental tenant vs. a vacation rental tenant. Vacation rentals will also charge a premium because of the weekly lease term; however the high turnover and sometimes occupancy can often outweigh the benefits of “earning” a higher rate. Vacation rentals have a much higher “Grief per Dollar” as properties must be cleaned, prepped and leased dozens of times each year. Corporate renters generally stay for 3 months or longer and they aren’t trying to fit a dozen Spring Break college kids in your property.
7 – What kinds of properties make good corporate rentals?
Look for properties that are located near city centers, hospitals and universities, as well as ones with small square footage yet high bedroom counts. Remember, an extra-large family room or a special “bonus” room is nice for a homebuyer who is looking to settle down with a family, but a renter is only interested in bedroom counts and location. A small, one bedroom condo will be able to price itself more competitively than a one bedroom with bonus room – all other amenities being equal. Remember this: Evaluate rental rates and square footage to determine a value per square footage.