Corporate rentals combine the benefits of short-term rentals with longer-term leases, compared to rental platforms like Airbnb.
What is Corporate Rental Property?
Corporate Rentals are properties that are rented to corporations. The properties are often used by corporations to house employees who are temporarily in the area and to entertain clients and VIPs. The landlord (real estate investor) receives rental income, which is typically higher than non-corporate rental properties.
Rent for corporate rentals is paid monthly on a long-term contract (often one to two years), which also increases pricing power for property owners who can charge higher rates compared to short-term rentals.
Corporate rentals are often rented to companies in the condition that is most beneficial to meet their needs, which typically includes all the furnishings and desired amenities.
Benefits of Corporate Rentals
Corporate rentals provide a range of benefits including:
- Additional security, which is often paid for by the corporation renting the property to the property owner.
- The owner of the property and corporation renting the property have open access to one another, which benefits both parties when issues arise.
- Although corporate rentals may be less expensive than an Airbnb rental when looking at a daily rental rate, the long-term contract provides owners with the opportunity to triple their investment income.
- Owners of property leased to corporations long-term have a higher occupancy rate, spend less time finding new tenants, can have fewer repairs and maintenance, often have lower rental costs, and typically have higher profits.
- Corporations that lease property for employee use and to entertain typically have a set budget for rentals and are more stable tenants.
Role of the Property Manager
A limited number of property managers work with corporate rentals. The contracts require an increased level of work to execute. Also, more work is needed to prepare the properties which must be complete with all the amenities and advanced security systems required by the renter.
Suitability of Corporate Rentals
Luxurious corporate rentals are suitable for companies that entertain, have staff that travels extensively, have training staff that works remotely, and have staff working on remote projects. Examples of these types of companies include:
- Medical and pharmaceutical companies.
- Law firms.
- Banks and financial firms.
Economical corporate rentals are suitable for housing staff who travel but do not entertain corporate executives. These rentals also work well with companies such as insurance companies that need to house displaced families for extended periods of time.
Corporate rentals provide a more attractive alternative to hotels because they include a full array of facilities and amenities that can include a chef’s kitchen. Corporate rentals, therefore, are growing in demand and are popular with businesses as well as employees.
Larger properties with up to four or five bedrooms are often desirable as corporate rentals because business professionals who use these rentals often bring their families or clients.
A property will be a suitable option as a corporate rental if it:
- Is close to transportation, such as airports.
- Has easy access to a major business metro.
- Has the amenities and facilities renting corporations require.
Ideal Geographic Locations of Corporate Rentals
Ideal areas for corporate rentals in Metro Tampa Bay include:
- St. Petersburg
- Port Richey
- Tampa Bay beach communities
Process of Setting Up A Corporate Rental Property
The process landlords must complete to prepare their property as a corporate rental includes ensuring that the property is compliant with state and local laws, secure, and fully furnished. However, unlike Airbnb, a license is not be required.
Once the property is ready to be rented to a corporation, it is marketed to ideal corporate prospects, then the lease is negotiated and signed.
Why Use A Property Manager for Corporate Rentals?
If you use a property management company like Graystone, the company will explore your current portfolio of rental properties to determine which are suitable as a corporate rental.
Furthermore, if you purchase rental property suitable for a corporate rental, your property management company can do the rehab and prepare it to be rented.
For landlords that want a completely hands-off approach, property management companies can provide a full array of services that result in passive income cash flow.
Corporations treat corporate rentals as a business transaction. They seek organized and professional investors. Their aim is to ensure that the property provides secure and comfortable accommodation for their employees and is also suitable to entertain.
They can be more inclined to complete a contract with a property manager providing an efficient service, rather than an individual investor.
Providing professional, high-quality service to corporate rental clients helps property owners build their reputation among business professionals. So, as demand for corporate rentals increases, the landlord is better positioned to win new clients.
Graystone Investment Group
If you would like to learn more about the exceptional opportunities for real estate investing in Metro Tampa Bay, please contact us.
Our team of licensed real estate agents and property management experts can assist you with every aspect of investing in corporate rentals, including providing turnkey solutions that produce passive income cash flow.