Trends: Investing in More Corporate Housing Real Estate

The answer is “Yes.”

Question: “As a real estate broker does it make sense to learn more about corporate housing real estate investing.”Sold png logo

Why: “Because the survey says people want to buy more!”

If you believe in human evolution you want to believe we continue to do what works and we stop doing those things that do not work.  So it is important to know what current corporate housing real estate landlords plan to do in the future because this will give us the best picture of their current satisfaction.

Spoiler Alert: Yes, Corporate Housing Real Estate Landlords plan on investing in even more real estate in future! – Kimberly

Corporate Housing Investing Real Estate Trends: Do you have plans to buy more real estate?

So, we’ve all heard that the Real Estate Market is back. Based on the responses to our previous question, we also know that corporate housing is profitable.Investment in real estate

Consistent with previous years, more respondents say, “Yes, I plan on buying more real estate” (45%), than “No, I’m done with real estate” (18%).

With that said, we’ve noticed a new trend to watch. In previous years, there was a steady decline in those who said they were done with real estate investing. However, in 2015, the number of respondents who say they’re done with real estate investing rose 5%. This is the first increase we’ve seen in this number since we added this question to the survey in 2010.

We’re seeing some long-term investors exit the market after weathering the ups and downs of the last 10 years. They’re selling their properties and aren’t re-investing right away.

* In the past, some economists said they believed there was a correlation between the slow pace of the real estate recovery and people feeling stifled by banks that didn’t want to lend money at low interest rates. With this in mind, we added a question in 2011 to see if people felt hindered by the banks. Today, this is no longer a factor.

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Trends: Corporate Housing Real Estate Profitability

As you may have read in other blog posts there are lots of reasons a landlord may have for turning their real estate into a corporate housing rental. The reality of life is things do change and corporate housing can be a great solution for your real estate whether or not that is the reason you purchased the real estate in the first place.  

Ok, so now you know you can turn lots of real estate into great corporate housing rentals, however the next question is, “As a corporate housing real estate landlord can I make a profit?” Since you want to know, for the last 5 years we have been asking that question on our CHBO Corporate Housing Real Estate Survey. – Kimberly

Corporate Housing Real Estate Profitability

Furnished rentalIf you’re new to corporate housing rentals, you may want to know what other corporate housing property owners think about profitability.

Great news, for the fourth year in a row, more than 9 out of 10 respondents report their properties are profitable or breakeven. (This response is down slightly from 2014, which was the most profitable year since we began asking about profitability in 2011).

Continuing an encouraging trend, more respondents say their properties are “very profitable,” up 2% over last year.

Over the last few years, there has been a huge 18% drop in the number of property owners who say they just “break even” with their rentals. However, in 2015, this number went up by 7%. As we seen new investment owners enter the market they are purchasing real estate at higher rates which increases their expenses compared to previous owners who had owned their rentals for a while and had a lower cost basis on their rentals, thus higher profitability.

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Trends: Reason for Being a Corporate Housing Landlord

I am sure by now you have all read my book “Idiot’s Guide: Making Money with Rental Properties.” 🙂 Well my first book pitch was actually the “What if… Real Estate Guide.”  

I mean, I like to believe everything in life is predictable, but life has taught me that it is not.  In fact one of my favorite things about CHBO over the past 10 years of helping property CHBO turns 10owners is that our platform gives them options when life is unpredictable. The thought behind my “What if” idea is that life changes and often our real estate investments are not as flexible as we need them to be and through CHBO we have been able to support thousands of property owners and tenants when they need other options.

It is with this idea in mind that we ask our Survey Responders “Why” they are corporate housing landlords. – Kimberly

Reason for Being a Corporate Housing Real Estate Landlord

Understanding who is a typical corporate housing landlord and how current real estate trends affect decisions can help you better understand how you and your rental property fit into this industry.Reasons for housing landload

Once again, the majority of respondents tell us they are landlords for investment purposes.

The continuing trend in the “other reason” category appears to be “partial landlords.” We define partial landlords as property owners who have a fully functional, stand-alone guesthouse 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 “Share Economy” in which property owners rent out a room within their residence, sharing the same space as their renter).

Learn more Corporate Housing Real Estate Trends.