What is Corporate Housing and Is It Right for Your Rental Property?

Leasing your San Diego investment property as corporate housing means renting it out to companies who need temporary accommodation for their employees. Expanding your investment portfolio with this type of rental can potentially bring you large revenues, as it’s one of the most profitable rental categories.

This guide, intended for homeowners and landlords, explains what corporate housing is. We will talk about the basics and main features like services offered, pros and cons, typical client base, and the price. The goal is to provide you with the necessary knowledge and tools which will help you generate fantastic returns. You will also discover how to get started with corporate rental and how hiring a property management company can help you run a fruitful business. Are you ready to find out how to become a successful corporate housing landlord? Begin with our guide.

Corporate Housing vs Short Term Rental: What’s The Difference?

While vacation rentals and hotels are mostly intended for shorter stays, corporate apartments are leased for 30 days or more and they offer benefits which are not commonly found in vacation rentals. For instance, the flat rate is inclusive of utilities (gas, water, electricity, and Wi-Fi) and services. Below is a table with side by side analysis.

	Corporate housing	Short-term rental
Duration of stay	30 + days	Short stays (less than 30 days)
Furniture & amenities	Fully furnished & equipped	Furnished, with recreational amenities
Utilities	Included in flat rate	Not included
Price	Typically higher priced	Lower-cost
Purpose of stay	Temporary relocation for work/study	Vacation & brief stays

Bedroom & bathroom

Just like being at home, the tenant will be provided with:

• Bed, mattress, and pillows
• Bedsheets, pillowcases, blankets, and covers
• Nightstands, alarm clock, clothes hangers, and lamps
• Towels, bath mat, laundry basket, waste basket
• Toiletries
• Personal hygiene supplies (toothbrush, toothpaste, toilet paper)
• Hairdryer

Kitchen

A kitchen in corporate housing is fully equipped with all the kitchenware and appliances you need to cook with ease.

• Pots and pans
• Cooking utensils (spatula, ladle, tongs)
• Knife set, bakeware, serving dishes
• Food storage containers
• Napkins, place mats, kitchen towels, oven mitts, pot holders
• 4/6 place sets (plates, bowls, glasses, cups, cutlery)
• Measuring cups and spoons
• Blender, microwave, toaster
• Coffee maker
• Kitchen utensils (can opener, cutting board, colander, pitcher, wine opener, measuring cup, etc.)
• Dishwasher

Utilities & Internet

Corporate lodging includes all the utilities and Wi-Fi, which helps you stay connected and complete your tasks without interruptions.

• Electricity
• Water
• Gas
• Trash pickup
• High-speed Wi-Fi
• Cable TV service
• Heating and cooling

Service upgrades

• Maid service
• Baby furniture 
• Valet dry cleaning
• Private garage, covered parking, visitor parking
• Phone line
• Pre-stocked fridge
• Larger bed or 2 twin beds (queen size is standard)
• Premium cable channels

Additional items

• Washer & dryer
• Mirror
• Area rugs
• Iron, vacuum cleaner
• Cleaning supplies (broom, dustpan, mop, bucket, sponges, detergents)

Access to amenities

To further improve living experience, guests have exclusive access to various amenities that help them lead a well-rounded lifestyle.

• Parks & recreational areas
• Conference centers, meeting rooms, business lounges
• Community events
• Fitness and sports centers
• Swimming pools
• Dining & entertainment
• 24/7 security

Why People Choose To Rent Apartments for Corporate Clients: The Benefits  

There are plenty of advantages of staying in corporate accommodation, especially in a city like San Diego, where thousands of business professionals travel to city every year, so the providers are competing among each other who will offer the best property. 

• All-inclusive price –  Major benefit is flat rate inclusive of all expenses (accommodation, utilities, cable, internet, and taxes). 
• More affordable than hotels – Corporate housing saves you up to 50% of the money you would otherwise have to pay for a hotel stay.
• Tax deductions – Partial or full cost of stay may be deducted as business travel or business expenses.
• Fully furnished property – Unlike small, confined spaces in hotels, the property is full sized and fully furnished, with enough space to live a comfortable life.
• Flexible lease agreement –  It allows guests to sign the lease for one month only, instead of full year, as typically required for long-term properties.
• 24/7 customer support – Dedicated agents are at your service 24/7, responding to your needs in a timely fashion.
• Added perks – Access to fitness centers, pools, meeting spaces, lounges, and game rooms.

How To Start a Corporate Rental Business in San Diego?

If you are thinking of converting your short-term rental (or long-term rental) into a corporate housing business, there are several important things to consider which will help you make money and run a profitable business. Key steps include:

• Step 1 – Carry out thorough research on corporate housing market – It helps you better understand market supply and demand, rent prices, the competition, and other essentials.
• Step 2 – Generate a business plan and consider the budget – Typical expenses include certification, licenses, renovation, furnishings, and management.
• Step 3 – If you don’t already have one, choose a property & furnish it fully with premium furnishings. – Pick a property that is in or near major business districts with good transportation links.
• Step 4 – Obtain necessary licenses and permits – Ensure you are compliant with local and state laws and regulations.
• Step 5 – Prepare rental contract – Counsel with legal advisors to ensure that both parties are protected from potential disputes. Offer flexible terms and conditions to cater to the needs of corporate travelers.
• Step 5 – Connect with local providers – Your best partner would be a local property management company who has the knowledge and comprehensive understanding of the market circumstances. They can offer valuable advice that will help you accomplish your goals.
• Step 6 – Create powerful advertising campaign or make direct connections with companies – Use online platforms and important network, or make connections with HR departments to bring business travelers to your property and fill vacancies faster.

Pros & Cons Of Running An Extended-Stay Apartment

Depending of your management style and competition in the area, corporate housing has potential to be very profitable. Let’s take a look at the pros and cons of operating corporate housing.

Pros

• Higher income – You can increase your gains as this type of accommodation is typically charged more than traditional rental properties. You can earn additional profit by catering to clients who are willing to pay for premium services.
• Reduced vacancies & turnovers – Lease agreements are longer than those of short-term rentals, so occupancy rates are higher and your turnover costs are minimized.
• Reliable clients – Business travelers and other professionals who are relocating are less inclined to miss payments or damage the property as they represent not only themselves but also their company. Plus, the company is usually the one paying for their employee’s stay.
• Repeat customers – If the company is happy with your services, they are more likely to book with you again.
• Possibility of upselling – Corporate clientele tends to pay for extra services such as airport transfers, grocery delivery, mid-day cleaning, sport equipment rental, etc. This is your chance to earn extra money from affiliates.

Cons

• Higer operating costs – Expect to pay more forthings like marketingand cleaning.You will have to manage the property professionally and seriously, which ultimately creates a sense of luxury. Consider setting up a decent website and regular professional cleaning.
• Demanding tenants – If you are hosting business executives and compete with top hotels, you have to be able to offer the kind of premium service they expect. This business model is profitable but it’s certainly not passive.
• High initial investment – Equipping the property with high quality furnishings and high-end amenities requires substantial initial investment.
• Fierce competition – Your competitors are established companies with large, so you must stay on top of your game in order to succeed in this market.

Closing Remarks

The corporate housing market has been expanding for years, and the demands of business travelers have grown, too. In such a saturated market, the competition is strong and in order to succeed you must be able to develop effective marketing strategy, deliver superior service, and provide fully furnished premium property with exclusive amenities. It is crucial to be aware of all the drawbacks that come with this business and prepare yourself to handle and remedy any concerns that may arise. For first-class service and exceptional management, you can also turn to rental property management companies. Swell property is one of those companies. We are game changers who will bring you larger revenues while building your brand and positive image among the clientele. For additional information, call (760) 452-2345.

Related Read On Short-Term Rentals

1. Must-Have Luxury Vacation Rental Amenities For Exclusive Clientele
2. What Is a Property Management Company & Why Its Crucial in Rental Business Success
3. How to Enhance Guest Experience
4. Expert Tips for Success from Rental Managers
5. Rental Property Maintenance Checklist Every Landlord Needs
6. 12 Essential Tips on How to Make Your Home a Vacation Rental