January 15th, 2016 (Denver, Colorado) – CHBO reports the 7th annual CHBO Corporate Housing Real Estate survey and finds corporate housing furnished landlords say 2016 is the year of division. Monthly corporate housing rentals, a $2.7 billion industry, is not the same as vacation rentals and should not inadvertently be lumped into that lodging segment.
To see the difference between corporate housing and vacation rentals, just look at the renter’s length of stay. The finding of this report states that 6 out of 10 respondents say their last tenant stayed for three months or longer. Fifteen percent (15%) say their last tenant stayed for one year or longer. At an all-time high in 2015, 78% of respondents say they would only rent their property for 30 days or more.
According to The Corporate Housing Providers Association (CHPA), “Corporate housing is fundamentally different from other types of short-term rentals. This well-organized industry provides a valuable service to businesses, employees and others in need of temporary housing while having a sizable economic impact on the communities where it operates. It is important that policymakers and officials understand the industry’s importance and are cognizant of its particular characteristics and value when creating and implementing short-term rental policies.”
Kimberly Smith, CEO of CHBO says, “there continues to be a strong need for professional corporate housing real estate rentals from independent property owners and managers. And personally, I believe the clients who need this type of lodging are very different from those who want a shared rental or an extended stay hotel. Think about the difference between buying a new car from a dealership versus buying a used car from an individual. These are transactions for two types of customers with very different needs. Likewise, a relocating professional who has a high paying, high pressured job and needs to relocate his or her family of five to a new city is looking for corporate housing from a professional.”
2016 is the year of recognition for corporate housing real estate as a lucrative investment niche answering the needs of a mobile workforce and others seeking quality monthly residential rentals. The outlook for the coming year held strong with 21% predicting 2016 will financially be “much better than last year.” Of those investors, 90% say their investment real estate is profitable and 45% are so positive they plan on buying more investment real estate.
Mrs. Smith says, “Corporate housing is coming into its own, gaining recognition and also gaining investors who see the revenue potential.” She believes Airbnb brought to the forefront the value to renters, the fun and even the “sex appeal” of what is means to immerse yourself in a community and now renters are discovering the corporate housing industry has been providing quality rentals for decades and takes the guessing game out of a community rental.
In this year’s findings, CHBO learned that Airbnb continued to beat HomeAway as one of respondents’ “most used” marketing sources and for the first time also beat them as the source for the “most renters.” Surprisingly Craigslist regained some traction, just as Facebook lost ground in all 3 marketing categories.
Our biggest surprise this year was that everyone spent less on marketing their corporate housing rental. In fact 63% (up from 55% in 2014) spent less than $500 on marketing their rental, however they were also less satisfied with their results. In 2015, respondents saying my property is “always rented” went down to 41% from 48% in 2014.
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.”
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.