There are a hundred and one reasons why you might want to become a landlord. You might want to try a new business venture, take advantage of a buyers’ market, or need the money to keep the property. Whatever your motives, corporate rentals aren’t like other rentals. They need a particular approach to be successful. That approach we discuss here.
Some are obvious, and will be relevant to any kind of furnished rental, others will be particular to corporate lets. We hope they are of use.
First up is location. Arguably the most important aspect of any property transaction, rental or otherwise. The location of the property must suit the type of property and the type of client you’re trying to attract.
Have a corporate apartment? It will need to be in a downtown area or near to transport. Have a single family home? Ideally it will be in a nice suburban area and also near transport links and amenities. The better the location and the more the property has around it, the more you can charge per month.
If you’re just starting out in corporate lets, use an agency to manage things for you. They take a percentage of the rent but their expertise is essential in those early days. They give you the breathing space to learn the ropes. Once you’re a little more experienced you can manage your corporate lets yourself, but don’t overburden yourself from the beginning.
Have money put aside for servicing the property. Corporate rentals are of a higher standard that standard lets, so take more to maintain. Budget for a thorough cleaning between tenants and allow for breakages and repairs. It also helps to have a few months mortgage put by for times when the property sits empty.
Make sure the paperwork is all covered. That means a solid contract, insurance and tax. If you’re using an agency, the legal stuff should be handled for you, but the insurance and tax burden is all yours.
Insurance is an investment like any other. As long as you get a policy specifically for rentals, you’re covered. You will still need the standard buildings and contents cover, but also extra cover for short-term tenants. Corporate rentals are low-risk, but you still need to cover yourself and your property.
Any profit you make in this enterprise will be subject to tax at the prevailing rate. The IRS are chasing tax revenue voraciously to balance the books, so make sure you’re not left exposed. Consult an accountant or tax professional to get the full picture. There are a whole host of expenses you can claim for, so don’t pay tax unnecessarily.
The corporate rental market is a niche market that is rapidly gaining ground. It is helping keep our real estate market fluid and contributes to the wellbeing of many people. If you want one of them to be you, go for it. Do it properly and it could rapidly become a successful venture.