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.

Creating Basic Rules for Corporate Tenants of Your Rental Properties

Happy tenants

If you are a property owner who is frequently host to a corporate tenant, you may be making assumptions that can lead to confusion or trouble. For example, you may simply assume that each corporate tenant makes themselves familiar with the “house rules” at the time they sign their rental agreement or begin to enjoy their stay. However, it is really up to you, the landlord, to ensure that there are 1) basic rules in place and 2) that you take time to familiarize each tenant with them.

Doing this ensures that your furnished apartment or other type of rental properties remain in the best condition, that all neighborhood or building policies are upheld, and that the rental goes off without any of those proverbial “hitches”.

Happy tenants

That means you’ll begin by creating some basic rules for each corporate tenant or renter, and then ensuring you review them as part of the application and rental process. It is easier than it seems, and begins with the rules.

If you talk to experts, the most basic rules you need to supply and discuss with a corporate tenant or renter would include:

  • The formal date that rent is due, and the date it is seen as late. In the written rules, be sure to itemize whether you will charge a late fee or penalty, and be sure your state allows for such fees.
  • The terms around your “right of entry” as a landlord. Most states insist you give 24 hours notice before you enter, but it is still a good idea to itemize it in the basic rules.
  • The items within the rental that remain upon the corporate tenant’s departure. For example, if you are renting them a furnished apartment, set down what was there upon arrival and itemize all that remains (even small things add  up if tenants remove them, such as blinds or shades). So, make sure your rules are very specific about what remains.
  • The specific rules and dates for recycling and garbage removal. One expert said that this is one of the “biggest problem areas for landlords” as it can allow garbage to pile up and become a neighborhood problem.
  • A pet policy. Whether your furnished apartment rentals allow pets or not, it is important to have it written down in your basic rules for tenants. If allowed, be specific about numbers, sizes and even types. If certain breeds are not allowed in a building or neighborhood, be sure this is made clear in the rules. Also be clear about pet care policies including leashing, cleaning up after pets, and so on.

You also want to detail the length of notice needed if a tenant vacates early (and fees involved), maintenance rules to ensure they call if there are problems with appliances or household systems, and the condition the property must be in at time of vacating.

Why write it down and not verbalize it? Why not just put it in the lease rather than separately? It is best to convey your expectations and requirements in writing to allow you to take any legal actions later and to prevent any abuses from occurring. A simple document to be signed and witnessed is all it takes to set solid house rules.

Top Questions from Corporate Housing Investors

Are you eager to learn about investment options with big potential? If so, you have already heard about corporate housing, no doubt. There is much to know about it, though, and you’ll want to have the right questions (or answers) from your realtor in order to make a good choice.

Let’s start with the basics – what is it?

Your realtor should tell you that it can be a serviced apartment that is privately owned or part of a larger building also owned by a group or other entity. It might also be managed corporate housing that are typically privately owned but managed by a third party group. Then there is owner operated corporate housing that is the most basic and direct – you own it and manage it.

corporate housing investors
Which is best?

That is not something a realtor should tell you as your goals and needs are different from all others. Will you manage? Would you rather just invest and let it go to someone else to manage? What is your budget?

How is it done?

When talking about a corporate managed or other form of serviced apartment, the basic operations are either handled entirely by you (the owner/investor) or via a company you hire to do the work. They take a commission or charge a monthly rate, and if that fits into your financial model, it could be a good solution.

Is it an investment comparable to others? That depends on many things, but if you research the market, you can earn anywhere from roughly $1k per month or more.