Real estate investment can be a lucrative opportunity, and corporate housing, with the right property, could be a good option for you. Yes, you can make money from unfurnished renting or short-term rentals like AirBnB, but it does not compete against the corporate housing market’s growth, cash flow, and maintenance advantages.
The market for corporate housing is only growing stronger and extending beyond traditional business relocations or frequent travel. The ongoing COVID-19 pandemic, where corporate travel came to a near standstill, proved the durability of the AvenueWest business model for corporate housing that resulted in the company ranking #435 on Inc Magazine’s fastest growing company list for 2021. Corporate housing is becoming an attractive option for individuals that are:
- Managing construction projects, consulting, researching, training or working in a location away from home
- Interning for a business that rents an apartment for a cohort of temporary employees
- Selling and buying a home
- Needing a place to stay during home renovations or following an insurance claim
- Providing care to family members
- Wanting to try out a new location as a possible future home base
All these potential guests means a growing market for furnished corporate housing units. Here are our top three reasons why real estate investors should consider corporate housing.
Higher rental income than unfurnished
In today’s tight housing market, fully furnished units are in high demand. According to the Corporate Housing Providers Association, the average fully-furnished two-bedroom unit rents for $185 per day — making owning a corporate housing unit a very lucrative opportunity.
Rates for monthly furnished rentals vary by region, even from one neighborhood to another. Still, according to apartments.com, landlords with furnished apartments can charge 15 – 20% more than those offering unfurnished rentals. After all, the guest can move in quicker and does not have to worry about taking the time to move furniture or pack. They just grab a suitcase and get settled in the temporary corporate housing apartment with its fully equipped kitchen, readied Internet access, onsite laundry and other amenities. It’s an attractive option for many that need these conveniences – and a much needed option for others following a home fire or other natural disaster.
So, while the initial investment can be higher at the start, the payoff is much greater in the long run.
The individual living in the rental may change from August to October after a ninety-day contract (or longer) concludes. However, with the AvenueWest model, your property manager will work to have your property consistently filled, often with the same business or corporation. Rather than having to communicate daily with new guests while also arranging key pickups and unit cleanings, as you would with an AirBnB, a property owner, on average, can enjoy regular multi-month rental agreements.
Compared to a traditional rental, with a dedicated property manager, you are saved from the aggravation of working with tenants that may frequently pay late, use up your time and resources, or don’t take care of your property (more on that one next).
With the typical tenant staying 99-days or longer, you can rest assured your unit is generating top rates for a longer period of time. Plus, managed corporate housing reduces the amount of time spent following up on queries about vacancies.
Reduced wear and tear
Corporate clients tend to maintain your rental well. Users of these housing rentals don’t want it to get back to their boss that they didn’t take care of the corporate apartment. Behaving badly in a rental property could risk their job. At the very least, it could reflect poorly on their company.
Business travelers and caregivers are busy and often away from the property, so this can help to keep maintenance and repair costs low too. In addition, since your guests are staying for more than 30-days, there is less traffic in and out than in a nightly AirBnB arrangement.
Partner with an industry leader
AvenueWest is a corporate housing industry leader specializing in move-in ready month-to-month residential rentals. Investors partner with us because we offer a turn-key, end-to-end solution. Whether it’s identifying a property to purchase, property management, resale, or adding onto your investment property portfolio, AvenueWest can be your dedicated real estate investment partner for corporate housing.