Corporate Lets – Are They Worthwhile?
The corporate rental marketplace is a specialist area that few landlords enter into so let’s have a look at this sector in a little more detail.
Firstly, let’s consider what sort of individual(s) you are likely to have occupying one of your properties. A large percentage of such lets are to blue chip/public companies for senior executives that are either relocating from one part of the UK to another or are transferring from an overseas office of their employer to a UK location.
Therefore, you will almost certainly find that the individual/ family are highly respectable and are owners of their own property that will have been well looked after. They are likely to be high-income earners who take pride in their home whether it is owner occupied or rented. This, we are sure you will agree, is a positive factor and should mean that you are unlikely to be faced with having to carry out repairs to the rental property due to damage being caused.
The occupant is likely to remain in the property for an extended period of time if they have moved from abroad. Many corporate lets end up running for 2/3 years.
The rental agreement is likely to be with the company rather than their employee. A company will often wish to use their own lease document with an initial period of 12 months but it could have a break clause in it half way through. You would no doubt seek some form of guarantee/deposit from the company relating to covering the cost of any potential damages.
The type of property is an important consideration as it will need to be of executive standard with this being reflected in the price you pay for it. So, if you wanted to appeal to single executives, they may prefer to live in a quality one bedroomed apartment in a city centre location close to public transport. If you wished to attract family corporate lets such people often prefer to live in an expensive commuter belt area in a large detached property set in large grounds.
The furnishings would need to be in keeping with the quality of the property so you would expect to have a significant spend in that respect.
The rental income will be in keeping with the standard of accommodation and the fixtures and fittings.
Hopefully, the above has given you a few things to think about. Ultimately, you must make the final decision as whether you think it is worthwhile.