Outlook & Profitability for Corporate Housing

Outlook & Profitability for Corporate Housing

One of the essential sections of the CHBO Corporate Housing Real Estate Report is the Outlook and Profitability section. Through our surveys every year, we offer insight on all sorts of things related to executive housing. Since nobody gets into the business to lose money, knowing how profitable people find the market is an asset for those in the industry or considering getting involved in it.

However, with COVID-19 making things a bit unpredictable this year, it’s hard to say whether the respondent’s outlooks on the year will prove to be true. All of us are working hard to handle the pandemic, but it has had an enormous impact on businesses across all sorts of industries, with short term housing being no exception.

We do have other information that is still worth being aware of, and you can see the entire real estate report by logging into your CHBO account. For instance, one of the questions we ask is whether current owners of corporate housing believe their furnished rental is very profitable, profitable, breakeven, or unprofitable.

Here’s what we learned for 2020:

Unprofitable10%
Breakeven21%
Profitable57%
Very Profitable12%

As you can see from this information, short term housing is considered profitable for 69% of respondents, while 21% find they break even, and only 10% find they aren’t making a profit. If you compare this to results from 2018, many things are similar, but profitability has dropped slightly, according to survey respondents.

Another way to see how the industry is doing is by talking about whether current corporate housing owners are planning additional purchases of real estate. It turns out that 15% of respondents are already in the process, while 24% plan to make purchases in the next two or three years.

Only 13% said they would not be purchasing a new property, which is a massive drop from 2018 when this number climbed to 25%. The remainder of the respondents were unsure, plan to buy in more than three years, or are waiting to see what the economy brings to us.

As we mentioned, it’s hard to see sure where things are going since COVID-19 has been such a part of 2020. However, it’s believed that the executive housing industry will continue to grow despite the issues. We’ll have to wait for next year’s report to see how accurate that is!

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