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.

 

Corporate Housing By Owner Has Completed Its 9th Annual Corporate Housing Real Estate Survey

Press Release CHBO

The Corporate Housing Real Estate survey results indicate the trends, standards and the need for a monthly furnished lodging solution. The annual Corporate Housing report is now available for view or download.

Denver, CO, June 27, 2018 –(PR(dot)com)– Corporate Housing By Owner (CHBO), has recently completed its 9th annual Corporate Housing Real Estate survey, thanks to the largest number of contributors in its history. Participants included property owners with a single property, those with multiple properties and management companies. The survey was open to anyone who owned or managed a furnished, monthly residential rental in 2017 – not just to CHBO users. This diversity of input provides an excellent overview of this market which is significantly different from the short term vacation segment. Indicative of this, 60 percent of respondents indicated average stays were 3 months or longer. To get a better sense of where this market is headed and what opportunities it affords, CHBO urges a careful look at the survey results.

According to The Corporate Housing Providers Association (CHPA), “In 2017, the US corporate housing industry reported its fifth consecutive year of room revenue growth, hitting a new peak at $3.62 billion. In 2017, the 12.9% gain in revenues over 2016 was the fastest increase since 2011. This is comparable to the corresponding growth in extended-stay hotel revenues and far greater than the overall US hotel average 5% in 2017. For the fifth successive year, the supply of US corporate housing units increased. Average daily rate (ADR) rose 7.1% in 2017, more than tripling the growth in overall hotel ADR, according to STR, the premier company providing statistics on the lodging industry.”

Rental Success Starts with Understanding Data and Trends

A glimpse of the 2017 survey results indicates that new owners continue to enter the market, over 90 percent manage their own properties, over 44% are looking to buy new properties, larger homes have shown the biggest increases in rents, 60 percent of owners are renting without previewing the property. Amplification of these trends and many others, revealed in the survey, can provide valuable knowledge on how to navigate the corporate housing market in the future. The full report can be viewed and downloaded here

CHBO thanks everyone who took the time to complete the survey questions. The survey results give you an insight on the private owner segment of the corporate housing industry.

About Corporate Housing by Owner (CHBO)

Get CHBO’s Advice Before Investing In Real Estate

Beautiful young woman corporate rental

The advent of peer to peer property rentals is changing how we travel. Today, it is not difficult to find a residential style property to enjoy while you visit or work in some of the world’s most exciting cities, towns or locations. This has led to an entirely new industry to emerge, the “by owner” rentals. It has also turned lots of traditional investors into real estate investors, too.

These are people (and in some instances, groups of people) who might have opted to purchase a property that they use for ongoing income rather than purchasing stocks, bonds or other traditional investment vehicles. It is a great way to invest, and yet corporate housing rentals are not always a sure thing.

Growing Real Estate sales

Why not? Essentially, it is due to the simple fact that not all areas are well suited to corporate housing rentals, nor are all property types. As all of the world’s real estate investors say, it is all about “location, location, location” and so that is what you want to consider first. Where are you considering your potential rental? Is it in a city in which corporate travelers are likely to have a lot of interest? Are there seasons when corporate rentals won’t occur but which might be offset by leisure travelers? What about the size and condition of the property?

There are many factors that real estate investors must consider, and it is best to use whatever predictive services you might find available. CHBO features a handy “How much is your rental worth” tool that can allow you to simple enter an address and get a reasonable estimate of potential pricing.

Submit the details about the property (such as value, square footage, and so on) and you get a report that indicates what similar corporate housing rentals earn, and what you can expect from that property. This is invaluable advice to potential real estate investors because it allows them to see whether or not the property is in as competitive a place as they had hoped or thought.

Will such an estimate help you avoid corporate housing rentals that are not as profitable as you had hoped? Probably. This is because they specialize in corporate housing rentals rather than general rentals, meaning they are aware of the factors that might most impact real estate investors eager to profit from business oriented rentals.

For example, unlike recreational rentals, corporate properties must:

  • Be close to business districts or corporate headquarters
  • Have higher walk-ability scores
  • Be within easy reach of grocery stores and service providers
  • Have reasonable access to travel resources such as airports, train stations, and public transport
  • Have features and amenities that provide a home-like setting rather than a long stay hotel or more traditional temporary accommodation

There is a lot that goes into a good real estate investment, and when it is going to emphasize corporate and business guests, there are even further factors to consider. Use whatever free advice you can find before making the plunge and you will enjoy much higher returns.