Real Estate Corporate Housing Survey Says 2015 is the Year of the Battle
CorporateHousingbyOwner.com reveals the findings of annual survey -
Investment vs Profit; Airbnb vs Homeaway; Trulia vs Zillow and forget about Facebook
January 15th, 2015 (Denver, Colorado) CHBO reports the 6th annual CHBO Corporate Housing Real Estate survey and finds corporate housing furnished landlords say 2015 is the year of real estate profits. The outlook for the coming year is the strongest we’ve ever seen in our survey responses. In fact 96% of real estate owners and managers from across the United States have a positive view of real estate rentals and corporate housing in 2015. The battle? Of those investors only 18% of those investors plan to buy more investment real estate in 2015, down 5% from 2014. Kimberly Smith, the co-founder of CorporateHousingbyOwner.com says “We believe investors are sitting on the sidelines because they can’t find good deals.”
Rental Success Starts With Understanding Data and Trends
Whether you’ve owned or managed a corporate housing rental for 10+ years or you’re new to the industry, CHBO reports that success starts with understanding trends. Just because something has worked in the past doesn’t mean it will work in the future. If you pay attention to the trends and avoid getting stuck doing the same thing over and over, you greatly increase your opportunities for rental (and financial) success.
Mrs. Smith, says corporate housing landlording is nothing new, but obviously an increasingly popular option these days for the savvy real estate investor. “My hope is that this report will continue to help real estate corporate housing landlords become more educated, knowledgeable and profitable as it allows them to deep-dive into emerging rental trends and how such trends will impact them personally.”
For example, it’s important to follow rental rate growth. CHBO often sees property owners get into the habit of not raising their rates. Yet the data in our report suggests that rental rates are going up in many markets. In high-growth markets, such as San Francisco, you may be greatly under-pricing your rental property if you aren’t aware of what’s going on in your market. The complete 51 page report is available for CHBO Users and on Amazon.com.
In this year’s findings, CHBO learned that Airbnb significantly beat HomeAway as one of respondents’ “most used” marketing sources and Zillow beat Trulia by 2%. However, Airbnb and HomeAway tied as a source of the “most renters” for many property owners as did Zillow and Trulia.
If you’re a savvy property owner and real estate investor, you may want to list your property on CHBO, Airbnb and HomeAway for different reasons. If your goal is to have lengthy monthly and yearly leases on your furnished rental, CHBO is the only website that rents many of its properties for one year or longer. If you’re looking to fill short-term gaps with different types of renters, Airbnb and HomeAway can provide high volume.
Our biggest surprise this year was from those who market their properties on Facebook. While 21% of respondents say they market their rentals on Facebook, only 6% say they get qualified leads from Facebook, and no respondent chose it as the place where they get the most renters. Does this mean you shouldn’t market your rental property on Facebook? Not necessarily. However, if your time is limited, you may want to do your Facebook marketing last.
What You Should Know About This Report
Unique perspective. This report is different from other property management reports because it reflects input from independent owners and property managers, rather than full-service corporate housing companies.
Open participation. Our survey was open to anyone who owned or managed a furnished monthly residential rental in 2014, not just to CHBO users. Our goal is to get a good snapshot of the independent corporate housing segment, so you can learn from relevant trends and be successful.
New terminology. Historically, we’ve referred to this market segment as the “by owner” segment. Because our survey gathers input from property managers who oversee individually owned real estate, as well as property owners, we’ve changed our terminology to the “independent corporate housing real estate” segment.
Other key findings from the survey include
Rental rates rising. 35% report having higher or much higher rates in 2014 up slightly from the previous two years. 61% of respondents say they offered the same rental rates in 2014 as they did in 2013. Only 4% lowered their rates, and for the first time ever, no one reported offering “much lower” rates.
Actual Rental Rates. In 2014, average rental rates went up for all property sizes, except four-bedroom units. (We believe the latter may reflect a variance in the sample size.) The largest increases in rental rates were for one-bedroom units and five+ bedroom units.
Investment Real Estate Trends. 44% of respondents say, “Yes, I plan on buying more real estate,” rather than, “No, I’m done with real estate” at 13%. What’s interesting is that despite the positive outlook reflected above for 2015, 42% of respondents say they “don’t know” whether they’ll buy more investment real estate. One possible reason for this answer may be the lack of value-priced real estate available on the market today.
Corporate housing has gone to the ‘burbs. Counterintuitive to previous corporate housing trends where properties were located in “city centers,” according to the majority of private corporate rentals who responded to this survey, CHBO real estate corporate rentals tend to be located in suburban areas (45%), followed by central urban areas (23%) and then outer urban areas (23%).
You’ve Got Pets. Many long-term business travelers are arriving with pets in tow. 36% percent of survey respondents say they accept some type of pet in their corporate rental. Why? Of those who accept pets, about 69% say they take pets because it “gets their properties rented.”
Reasons for Being a Corporate Housing Landlord. 56% of respondents say the primary reason they are corporate housing landlords is for the long-term investment, down slightly from 2013. We have noticed an emerging trend of “partial landlords” respondents who are renting a separate, fully functional guesthouse or apartment on the site of their primary residence. We’ll continue to watch this trend in 2015.
Renter Types. In 2014, the top reason for renting was business assignments at 67%. We were surprised to see relocation renters at an all-time low of 42%. We saw all-time highs with: family (35%), healthcare professionals (29%), snowbirds (19%), renters due to divorce (18%) and professional athletes (15%). And yes, “marijuana tourism” made the list in 2014 as a reason why people were renting corporate housing.
Security Deposits, Travel Insurance and ARDI. Similar to the last two years, 82% of respondents say they required some form of a refundable security deposit, and 6% of respondents say they required Accidental Rental Damage Insurance (ARDI) as an alternative to a security deposit. 65% of respondents say they collected a security deposit of $500 to $1000 or one month’s rent. 12% didn’t collect any type of deposit.
Credit Cards. Approximately 63% of respondents say they accept some form of credit card payment from their renters, up slightly from last year. In 2014, MasterCard and Visa replaced PayPal as the most popular credit solution by an 11% margin.
Internet Reservations. In 2014, we again asked how respondents feels about real-time booking reservations, in which the property is leased through a computer website and the property owner has no interaction with the tenant. 43% of respondents say they have used one of these programs (up a significant 18% over 2013).
To download a free copy of the 2014 By Owner Corporate Housing Report, please visit CorporateHousingbyOwner.com.
About Corporate Housing by Owner (CHBO)
CHBO is a Team of Corporate Housing Professionals. CHBO works daily to support quality corporate housing rentals and qualified renters find solutions. We are focused on Corporate Housing rentals around the world and our on-line portal works to connect properties and renters as quickly as possible. CHBO was founded in 2006 out of a need to connect private homeowners and real estate investors offering furnished, monthly rentals with corporate housing seekers such as traveling executives, relocated professionals, traveling nurses, actors, athletes and more. The company provides individual homeowners and investors resources and guidance to help them strategically manage their corporate housing rental properties as well as exposes their properties to thousands of potential tenants worldwide who are seeking monthly housing options. Please visit CorporateHousingbyOwner.com for more information.
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