Multifamily partnering with Corporate Housing
Forming an excellent relationship with Corporate Housing Providers (CHPs) is a smart alliance because of how valuable a partner you can gain to lease up your property and keep it that way. There are approximately 61,280 corporate housing units occupied every day paying one billion dollars in annual rent. This is a huge revenue stream to tap into!
Here are the top 5 reasons why partnering with a CHP is a smart move for those who own/rent apartment properties.
1.) Working with corporate housing is easy!
• Working with corporate housing is less work. Apartment communities that work with CHPs on a regular basis love it. Because you are in similar businesses, you can expedite the leasing process and cut down on your workload, which means you have more time for other things. CHPs sign leases on a daily basis and don’t require the additional time that is typically spent on walking through a lease with an individual prospective renter. Additionally, CHPs rents are always paid on time, which means no three-day notices and chasing down rental payments.
2.) Make more money with corporate housing
• CHPs typically pay market rent and in many cases pay a premium for shorter term leases. Although they often ask for deposits to be waived, they do pay administrative fees, which means leasing agents still receive their commission and the leases are still “on the books” for bonuses.
• When good communication occurs between the property and the CHP, and there is a good process in place, it makes for a very beneficial relationship. Corporate housing companies love properties that work with them and the properties will see more leases because of it, which means more revenue for the property.
• **Here’s an inside secret** CHPs will target and market the communities that are easiest to work with!
• There are many times that a CHP will start with a short term lease and those leases will keep extending, starting at 3 months and turning into 2 and 3 year leases!
3.) Make turn cleans easier and less expensive
• As a rule, CHPs, like any other resident, are always responsible for any damages beyond normal wear and tear. Many CHPs send in housekeepers after vacating a unit to do a turn clean, so turn costs are very low or nonexistent.
• Turn clean costs are also something that you can request or negotiate for with a CHP upfront, which would negate any loss on a turn clean.
4.) CHPs take care of paying taxes on short term leases
• For example, in the state of Florida, any lease under 181 days requires that state and local taxes be collected.* CHPs will provide the apartment properties that they work with a tax resale certificate, which means the property has no liability to pay taxes on these short term leases.
5.) They screen their residents
• The CHP will provide the apartment community with, at the minimum, the guests’ name and contact information. If any property requires a resident screening, make sure you add that to the checklist when working with CHPs. Most CHPs are happy to provide this information and pay for the costs associated with the screening.
From the CHP perspective, they look for properties that offer a few different things:
1.) Well maintained properties in good locations.
2.) 3 month lease terms – what some properties prefer is that the CHP sign a 12 month lease with a 90 day minimum commitment with a 30 day notice requirement.
3.) A property with a good maintenance staff so that resident issues are handled promptly.
How to create a checklist for working with corporate housing companies…
There are some very important things to look for in a CHP to ensure that you are working with a reputable company.
Check www.chpaonline.org to see if the company is a member with the CHP Association. This is a great resource to learn about the company and learn more about corporate housing as a whole.
Are there Certified Corporate Housing Professionals within the company? This is an accreditation given to people who have passed a rigorous test, which shows their dedication and desire for excellence in the corporate housing industry.
Is the company registered with your state tax collector? Can and will they provide a tax resale certificate? Make sure to get a copy of it and check the state that it is from and the expiration date.
Google them! Or check LinkedIn, or Facebook, etc. There are so many resources available now to learn more about a CHP – take advantage of them.
Ask about move out cleaning. Will the CHP send in housekeepers to clean the unit after their guest vacates, or is there a cleaning fee that will be charged for turning the unit? It is always better to negotiate everything upfront so there are no surprises.
If the apartment community requires that every guest has a criminal background check, let the CHP know about that up front and any fees that are associated with this. Most CHPs will have absolutely no problem with this. Another option would be to talk with the CHP to see what processes may already be in place to see how they comply with the requirements.
It is a great idea to get to know the local CHPs. Pick up the phone and give them a call! CHPs can be one of your strongest partners, making your life easier and helping to keep your apartment community full.
* This varies by state, so check with your state tax collector to see what the liabilities are.