If you’ve considered offering corporate or short-term housing, you’re not alone. With property management costs steadily rising, property managers across the U.S. are looking for a reliable funding stream. With a significant increase in business travel and employee relocation, corporate housing is often suggested as a viable way to increase revenue. It’s no secret that corporate housing can be quite profitable. But before you make the leap into the corporate housing world, there are a few things you may want to take into consideration:
- If you’re looking to cater to an exclusive clientele, you’ll have to furnish the unit accordingly. That can mean spending thousands of dollars in furniture, appliances, and general décor, including subsequent upkeep between tenants.
- Marketing costs will likely increase as well, as you will be looking to reach a difference target audience than your standard property marketing currently reaches.
- You’ll be responsible for the utility costs for all corporate housing units. While the final cost can be estimated and included in the monthly rental rate, those that estimate too low, or don’t account for usage spikes such as increased electric costs from air conditioning or increased gas costs for heating, will likely find themselves losing money.
- An increase in staffing levels will likely be necessary. Remember that your office will be the main point of contact should something go wrong. Corporate renters are paying a premium to have someone available to handle problems and requests 24/7. Experts agree that it’s best to have a staff member dedicated solely to handling corporate housing, including everything from being the liaison between the corporate renter and your property management company. Does your budget have room for another employee?
- Increased cleaning, increased inspections, increased paperwork, and increased management responsibilities are part of the corporate housing world. Every time a new resident arrives or departs, property managers must go through the cycle of cleaning, inspecting, processing paperwork, and moving a tenant in or out. The work itself is nothing unusual; property managers do it all the time. But they typically do not have to do it upwards of a half dozen times (or more) for a single unit.
If you’re serious about offering corporate housing, test the waters slowly by offering a single unit in your apartment community. This experiment will help you determine accurate costs, both in terms of utility usage and in employee time. At that point, you’ll be ready to decide if corporate housing is in your future.
From:: Property Management