Are you looking for a way to increase income on your rental properties? Are you in a nice location that’s surrounded by lots of business activity and other attractions? If you’re willing to go against the grain and do something different, you could be a good corporate housing landlord. Not sure what that entails? Stick around and we’ll explain what this looks like in more detail.
What is Corporate Housing?
Generally speaking, corporate housing refers to any type of nicer housing that offers people fully furnished units for long term stays. A long term stay is generally considered to be anything three weeks and longer.
“Its name derives from the fact that corporate housing is often used primarily by companies to house employees for longer periods of time in order to save the cost of hotel bills,” explains Diane Schmidt of The Spruce. “It can be used for people traveling to another city for business meetings or to house temporary employees or contract workers.”
As the name infers, corporate housing originally referred to company employees. However, the term has expanded over the years and now includes anyone who might want to stay in a fully furnished house or apartment for a few weeks or months at a time. This includes college students, travelers, and even snowbirds traveling south for the winter. It’s also quite common for insurance companies to put displaced families in corporate housing until they can return home.
In other words, corporate housing is no longer just a tiny blip on the radar. There’s a big market for it in many parts of the country – including the Houston area where business is booming.
The biggest issue landlords and real estate investors have with the idea of corporate housing is that there isn’t a long term lease agreement in place. And since attrition is generally frowned up, the natural turnover that comes with corporate housing is viewed negatively. But the reality is that you don’t need corporate housing to be rented out 11 or 12 months out of the year. You can usually get away with just three to five months.
How so? Well, corporate housing commands a much higher rate. As a landlord, the goal is to price your unit at 40-50 percent less than a comparable hotel room for a month long stay.
“If a hotel room is $100 per night per person, then price your offering at $50 per night per person. If you’re offering a decked out 3 bedroom, 2 bath house, then you might price your offering at $150 per night or $4,500 per month,” landlord Al Williamson suggests. Compare that $4,500 to the typical $1,500 per month and you can start to add up the numbers.
5 Tips for Happier Corporate Tenants
The key to being a successful corporate housing landlord is to understand the differences between this unique model and traditional landlording. There are some nuances to dealing with corporate tenants and you have to pay attention to the finer details. Having said that, here are some helpful tips.
- Keep the Property Clean
There’s nothing worse than entering a rental and noticing how dirty it is. While it’ll cost you a bit more, get your units professionally cleaned in between stays. This adds a professional touch to your service and makes tenants feel comfortable.
- Know Your Market
There’s a lot of variety in the corporate housing market these days and you need to focus on a specific demographic in order to be successful. Are you going after blue collar construction workers who spend a couple of weeks in the area working on a project? Or are you targeting high profile attorneys who spend months litigating big cases in the courthouse nearby? Depending on your audience, the style, design, and amenities you offer – not to mention the price point – will be different.
- Be Highly Responsive
The point of a corporate rental is that the tenant is supposed to feel at home. It’s hard to feel at home if the toilet is broken, the electricity goes out, or there aren’t sheets on the bed. Mistakes happen and things will go wrong that are beyond your control, but you can always be responsive. Pick up the phone when tenants call and do everything you can to make them happy.
- Give the Unit Some Character
If a tenant wants cheesy wall art, stiff beds, and cheap coffee makers, they can stay at the nearest hotel. Add some character to your unit in order to make them feel at home. Decorate as you would if it were your own house. This added flare will leave a lasting impression.
- Hire a Property Manager
If you work a full-time job or have other real estate investments and responsibilities, you might not have the time or energy to handle all of the little needs that your corporate tenants have. That’s why it’s suggested that you hire a property manager to care for your units.
A property manager is worth every penny. They take care of tenant screening, payment collection, scheduling maintenance calls, handling complaints, and everything in between. That leaves you to focus on the big picture and enjoy some much needed downtime.
Partner With Green Residential
As a landlord, time is your most precious asset. Whether you have one small property or a portfolio of 14 different houses and apartments spread across the Houston area, you probably find yourself wishing there were more hours in the day to get things done. And while you can’t add hours to the day, you can remove some of the menial tasks and responsibilities from your plate by hiring a property manager.
At Green Residential, we offer professional property management services that are widely considered to be the best in all of Houston. Our family owned and operated business has been around for three generations and is built on the pillars of trust and transparency. For more information on how we can help, please contact us today!