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How do landlords manage corporate rentals?

Kimberly Smith writes on corporate landlord issues

Realtors, many investors will buy investment properties for the purpose of high cash flow vs. fixing and flipping. If cash flow is the preference, a corporate rental may be the investment your client has been searching for; after all, corporate housing is for investors looking to make more money and who are interested in alternative investment opportunities beyond traditional rentals or labor intensive vacation rentals.

We are continuing our Q&A guide to help real estate agents and their clients understand the ins and outs of corporate housing as an investment opportunity for their portfolios. Today we continue with question No. 2:

 How do landlords manage corporate rentals?

corporate housing rentals
A corporate housing rental in Gilbert, Arizona

There are two ways:

  •  One, they may hire a property management firm to manage the property for them. A typical property management firm will take a commission of 25% – 35% from the earned rental income; however, these companies earn their keep as they are the ones tenants call at all hours of the day and night with maintenance issues. Plus, these management firms handle all management issues from marketing to contracts, inspections and key exchanges. Most importantly these companies have established corporate contracts with business clients who rent properties from them on a consistent and exclusive basis.
  •  Two, an investor may choose to manage the property him or herself in order to increase his or her income. When this is the case, the owner will need to do their own marketing to find tenants, as well as their own day-to-day management of the property. “By owner” management is only recommended for investors who take a hands-on approach and don’t mind being bugged with phone calls about the toilet getting stopped up and can accommodate the demand of a quality business tenant.

In the interest of full disclosure, my company, AvenueWest Corporate Housing, is a property management firm that handles issues in the first bullet above. My other site, CorporateHousingbyOwner.com, can help investors with the second bullet point.

Also, Kimberly’s book is out, “Making Money with Rental Properties.” You can find out more about her book here.


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