Have you heard of corporate housing? Many people understand the benefits of investing in short-term rentals, but fewer people understand that vacation homes aren’t the only type of short-term rental. Corporate housing is a unique investment strategy that may be the passive income solution you’ve been looking for. Is corporate housing a good investment? How does it differ from other short-term rentals? Who uses corporate housing? Find the answers you need.
What is Corporate Housing?
Corporate housing is a temporary housing option with many same amenities and services as a vacation rental but with a few key differences. Corporate housing is an excellent option for business travelers, military personnel, disaster relief workers, and other professionals on assignment.
Corporate housing units are usually located in major city centers or other large employers. Hospitals, manufacturing plants, and agricultural areas all attract business travelers indeed of rental housing.
The Benefits of Investing in Corporate Housing
Corporate housing is an alternative form of temporary lodging for people who need accommodations for a longer period and want to avoid the downsides of hotels. It offers home comforts without purchasing furniture or signing long-term leases.
Almost all types of homes can be used as corporate housing rentals, from furnished apartments to townhomes and condominiums, as well as single-family homes and luxury villas in desirable locations. As an investment, corporate rentals offer many valuable benefits.
Longer Stays & High Rental Rates
The biggest benefit of investing in a corporate rental property is the potential for strong and stable cash flow. Since corporate housing is typically rented on a short-term basis, landlords can charge higher rates than they would for traditional long-term rentals.
In addition, corporate tenants are often willing to pay a premium for high-quality accommodations that provide home comforts. Their stays may be tax-deductible or covered by their employer, giving them more financial flexibility than vacationers paying out of pocket.
Temporary corporate rental agreements can last several months, meaning you can enjoy more sustained income and fewer expenses related to cleaning the home for new guests.
Corporate rentals also tend to have lower vacancy rates than traditional vacation rentals. Because the demand for corporate housing can be more consistent, these investments may have fewer vacancies than vacation rentals.
Of course, corporate rentals aren’t completely exempt from seasonal rental demand. However, if your investment property can appeal to business and vacation travelers alike, you’ll be able to avoid costly income lapses.
How Does Corporate Housing Differ from Other Short-Term Rentals?
The main difference between corporate housing and other short-term rentals is the length of stay. Corporate housing can be rented for anywhere from one month to several months, while most vacation homes and Airbnb rentals are typically only available for a few days or weeks. If you’re struggling to choose between short- and long-term rentals, corporate investments may be perfect for you.
Another key difference between corporate housing and other short-term rentals is the amenities offered. Both types of rentals include furniture, housewares, linens, kitchen supplies, cable TV, internet access, utilities (such as water/sewer/electricity), onsite laundry facilities, and sometimes even concierge services. However, a business rental may also offer a home office equipped with a computer, telephone, or printer.
The cost comparison between corporate housing and other types of short-term rentals also varies greatly depending on location and availability. However, corporate housing tends to be more expensive than traditional vacation home options due to its extended-term commitment and additional amenities provided with each unit rental agreement, such as furniture packages, etc.
Conversely, Airbnb prices fluctuate based on demand, so it can sometimes be cheaper than corporate housing options and traditional vacation homestays, depending on when you book your reservation dates.
Corporate housing offers a unique combination of amenities and services, making it an attractive option for short-term rentals. Understanding the differences between corporate lodging and other short-term rentals is essential to determine if this is the right investment opportunity.
Who Uses Corporate Housing?
Business travelers and professionals on assignment often use corporate housing for their short-term stays. These individuals may be traveling for work or relocating to a new city and need a place to stay while looking for permanent accommodations.
Military personnel and their families are other groups that frequently use corporate housing when transferred from one base to another. This type of accommodation is ideal because it provides them with a home away from home where they can feel comfortable during their transition period. In addition, military personnel may receive discounts on certain types of corporate housing due to their service status.
Medical workers such as doctors, specialty surgeons, and traveling nurses often rely on short-term corporate rentals for their housing needs. These professionals frequently travel for work, whether it be for temporary assignments or to attend conferences and seminars. As such, properties near hospitals and other specialized health facilities can make lucrative investments.
How to Choose the Right Location for a Corporate Rental
Choosing the right location for corporate rental investment can be a daunting task. Researching your options online is the best place to start. It also helps to look at cities you already know well. If you’re frequently out of town for work, consider the places you wish had more short-term rentals for business travelers. Here are other factors to consider when choosing the location for a corporate apartment. Additionally, many of the best vacation rental markets are also great for corporate rentals.
Proximity to Business Districts & Conference Centers
One of the most important factors to consider is the proximity to business districts and conference centers. Business travelers often prefer to stay close to their place of work or the location of their conference, so choosing a conveniently located location in these areas can increase the demand for your rental.
Access to Public Transportation
Another important consideration is access to public transportation. Business travelers often prefer to use public transportation to get around, as it is often more convenient and cost-effective than renting a car. As such, choosing a location that is close to public transportation can make your rental more attractive to potential tenants.
Amenities & Attractions
Finally, consider the amenities and attractions in the surrounding area. Business travelers often have downtime during their trips and may want to explore the local area. Choosing a location that is close to restaurants, shopping, and entertainment options can make your rental more attractive to potential tenants.
FAQS about Corporate Rentals
Can I list corporate rentals on Airbnb?
Yes, you can list corporate rentals on Airbnb. However, it’s important to note that Airbnb is primarily designed for short-term vacation rentals, and corporate rentals may have different needs and requirements. Additionally, you will still likely need to follow the short-term rental regulations in your community.
Are corporate rentals more profitable than short-term rentals?
It’s difficult to say whether corporate rentals are more profitable than short-term rentals in general, as the profitability of a rental property depends on a variety of factors, such as location, demand, and operating expenses. It’s important to evaluate the market conditions in your area and make a strategic decision about how to rent out your home.
Can a corporate rental also be used as a vacation rental?
Corporate rentals can sometimes be used as traditional vacation rentals, but some restrictions may apply For example, some communities dictate that renters must stay for longer than 30 days. If this is the case for your property, then your home could not be used as both rental types.
Is Corporate Housing the Right Investment For You?
Corporate housing is an excellent option for those looking to rent out their property short-term but don’t live in a traditional vacation destinations. It offers many benefits over other short-term rentals, such as flexibility and convenience. Corporate housing can be an ideal solution for business travelers or those needing temporary accommodations, meaning the profits are there for you to earn as an investor.