Corporate Housing Real Estate Report 2017: Outlook & Profitability

Profitability

Great news for Corporate Housing​, the fifth year in a row, more than 9 out of 10 respondents ​report their properties are profitable or break-even.

Over the Profitability pie chartlast few years we have seen an influx of new investment owners entering the market. And they are paying more per square foot for their property purchases than that of previous owners. This means their overall expenses are now greater than the former owners. of these properties and profitability is therefore reduced. Owners with a lower cost basis and with rising rents have seen increased profitability. This year however, factoring in these new owner’s profitability went down a bit.

 

 

Profitability percentages

 

 

 

 

Investment Real Estate Trends: Plans to Buy More?

Investment in properties

We’ve all heard that the real estate market is back and based on the responses to our previous question, we also know that corporate housing is profitable. Consistent with previous years, more respondents say, “Yes, I plan on buying more real estate” (42%), than “No, I’m done with real estate” (21%).Investment in properties percentages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Do you plan to buy more? Tell us your plan in 2018 in the comments below.

To learn more about this topic and other results, view the CHBO annual report.

To view Historical Reports, visit here.

Tax Scenarios for Furnished Houses for Rent

Property Tax Information

Whether tax season has come and gone or has just begun, if you have any furnished houses for rent, it is of the utmost importance that you know how taxes may help you to enjoy higher returns.

In another CHBO article on this issue, we considered the expenses that you could (and could not) deduct at tax time, and it is a good idea to re-familiarize yourself with the viable deductions. However, many owners are unclear about rental property taxes and what the overall tax implications might be for this sort of income.

Property Tax Information

One of the first issues that many owners consider is whether or not that income is taxable. The tax experts have this to say: “rental income is taxable, but that doesn’t mean everything you collect from your tenants is taxable…You’re allowed to reduce your rental income by subtracting expenses that you incur to get your property ready to rent, and then to maintain it as a rental.”

That means maintenance, marketing, HOA, educational, accounting, and insurances, taxes and other financial fees are all among the deductions you can reasonably deduct from rental property taxes. Of course, most experts will agree that offering furnished houses for rent can create a real headache for you at tax time, but that does not mean that rental property taxes should be something that keeps you from this lucrative investment. Instead, just work with a savvy tax expert in advance of even investing in a property, and learn about the ways you can reduce taxes and enjoy easier accounting at the end of each year.

Don’t forget that your advertising fees on CHBO are tax deductible. Save your receipts and write it off.

CHBO Annual Report Review: Corporate Housing Landlords – How Long and Why

The results are in, so let’s dig deeper. Each week CHBO will analyze data from the annual corporate housing report and open a discussion. Please provide feedback with your experiences in 2017. This week we discuss how long our providers have been Corporate Housing landlords and why.

Years as a Corporate Housing Landlord

Years as a Corporate Housing Landlord

Property management, of corporate housing, by independent owners remains an emerging field. It’s a field that more owners are committing to, in order to achieve rental success. Consider that:

  • 60% of respondents​ say they’ve been furnished landlords for four years or less. Continuing the trend of new investors entering the real estate investment market.
  • Only 40% of respondents ​say they’ve been furnished landlords for five years or more.

In last year’s annual report, we predicted that if interest rates remained stable in 2017, we should see a “possible increase in new investors who are willing to enter the real estate investment market.” Not surprising that prediction was correct. We saw new investors entering the corporate housing real estate market at a year over year increase of 5%,​ our highest increase ever.

Years as a Corporate Housing Landlord

 

Reason for Being a Corporate Housing Landlord

Reason for Being a Corporate Housing Landlord

Once again, the majority of respondents tell us they are landlords for investment purposes​. This year at an all-time high of 60%​. The “other reason we’re a landlord” category continues to be as “partial landlords.” We define “partial landlords” as property owners who have a  fully functional, stand-alone guest house or apartment suite on the same site as their primary residence. Traditionally, this may have been referred to as an in-law apartment. (Please note, this is different than the “shared space” where property owners rent out a room within their residence, sharing the same space as their renter.)Reason for Being a Corporate Housing LandlordTo learn more about this topic and other results, view the CHBO annual report.

To view Historical Reports, visit here.