Corporate Rentals vs Airbnb

Short-Term & Vacation Rental Discussions
5yFollow

Corporate Rentals vs Airbnb

Nadia DaggettBusiness Member
Real Estate Broker · Tampa, FL · Member since 2019 · 92 posts · 60 votes

Corporate Rentals, Rentals that are 1 to 3 months and sometimes up to 1 year, leased by businesses, snow birds, insurance claims and more, seem to be at least double in profitability than Airbnb/VRBO structured investments and 3 times regular long term rentals. The occupancy is more like 70/30 with allows higher return on investment with more quality tenants. Does everyone else have these same results or just in Florida?

[email protected]813-527-1030
3Reply
55 views

Most Popular Reply

Bryan Wells
Oceanside, CA · Member since 2020 · 7 posts · 17 votes
5y

Other than FurnishedFinder (previously mentioned, thanks Bob E!) or calling up local hospitals, ect., how are you finding tenants?

3Reply
See this reply in the discussion

12 Replies

Jump to latestLatest
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Nadia Daggett, personally I think these sorts of rentals are area specific. How did you come to the conclusion that it would be double? Is that based on personal experience?

    In an area like Tampa I would think that vacation rentals have a strong return.

    2Reply
  • Ryan Copeland
    Rental Property Investor · Columbia, SC · Member since 2020 · 244 posts · 275 votes
    5y

    @Nadia Daggett I'd like to know more about the numbers you stated.  Like the previous person asked, how did you come up with double in profitability?  Also, how would someone go about marketing a property for a Corporate Rental?

    2Reply
  • William Beck
    Realtor · Branson, MO · Member since 2018 · 272 posts · 283 votes
    5y

    @Nadia DaggettThis answer is market dependent. 


    I think one idea to capitalize in certain heavily seasonal markets that I'm imagining you are referencing is a hybrid model. For Phoenix, Southern Florida, and to some degree Coachella Valley (Palm Springs/Palm Desert/La Quinta - although I despise their regulatory environment and would steer people clear) you could have your vacation rental rented in peak season, as such, to get all the upside that comes with it. Then block your calendar for the very slow months. Since those are all seasonal snow bird heavy markets, they will have high occupancy Nov-April and get peak daily or weekly rates. Then in the offseason, since your calendar is blocked, just seek out a tenant in the form of a corporate rental, traveling nurse, or someone looking to relocated. That would even allow you to undercut you monthly rental rate if needed to basically guarantee you'll get a tenant for the dead season. 
    Using a Phoenix 2BR as an example, if you're pulling $3000-$4500 / month as a vacation rental for those 6 months and then the going rate for a long term lease in the area is $1500/month, you could get a tenant in there for $1300/month for the slower 6 months and still be making way way more than just solely doing the corporate rental strategy or the vacation rental strategy. Just an idea. 

    2Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    5y

    It must be something Florida specific.  Where I'm at, corporate rentals don't exist.  The companies just give their workers a per diem and they have to find a place on their own.  

    1Reply
  • Onan Dumas
    Investor · Rowlett, TX · Member since 2013 · 132 posts · 72 votes
    5y

    @Paul Sandhu

    I was going to say the same, never heard of it in my area. I’m aware of the concept but it just doesn’t happen here or enough for me to have noticed at least.

    0Reply
  • Bob E.
    Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes
    5y

    Check  here  to look for rental in your area.  I just searched "Travel Nurse Housing"  and got a bunch of websites.  I doubt there are many major rental markets that do not have listings.

    1Reply
  • Nadia DaggettBusiness Member
    OP
    Real Estate Broker · Tampa, FL · Member since 2019 · 92 posts · 60 votes
    5y

    @Michael Baum Yes, when I calculate the average for the year, I calculate almost double due to vacancies. And seems that the clientele are much better and take care of the property more. This is from our experience with our short term property management company here in Tampa.

    [email protected]813-527-1030
    1Reply
  • Katharine Gonzalez
    Investor · Goshen, NY · Member since 2015 · 56 posts · 12 votes
    5y
    @William Beck   Thank you for sharing this strategy as I hadn't thought of it. Makes absolute sense. As I search for my next STR, I will keep this in mind.


    Originally posted by @William Beck:

    @Nadia DaggettThis answer is market dependent. 


    I think one idea to capitalize in certain heavily seasonal markets that I'm imagining you are referencing is a hybrid model. For Phoenix, Southern Florida, and to some degree Coachella Valley (Palm Springs/Palm Desert/La Quinta - although I despise their regulatory environment and would steer people clear) you could have your vacation rental rented in peak season, as such, to get all the upside that comes with it. Then block your calendar for the very slow months. Since those are all seasonal snow bird heavy markets, they will have high occupancy Nov-April and get peak daily or weekly rates. Then in the offseason, since your calendar is blocked, just seek out a tenant in the form of a corporate rental, traveling nurse, or someone looking to relocated. That would even allow you to undercut you monthly rental rate if needed to basically guarantee you'll get a tenant for the dead season. 
    Using a Phoenix 2BR as an example, if you're pulling $3000-$4500 / month as a vacation rental for those 6 months and then the going rate for a long term lease in the area is $1500/month, you could get a tenant in there for $1300/month for the slower 6 months and still be making way way more than just solely doing the corporate rental strategy or the vacation rental strategy. Just an idea. 

    2Reply
  • Nadia DaggettBusiness Member
    OP
    Real Estate Broker · Tampa, FL · Member since 2019 · 92 posts · 60 votes
    5y

    @William Beck I like this idea. Yes, my strategy is similar but opposite. We actually use corporate rental strategy and then fill in the gaps with short term renters. Yes, like you said, this is an area specific, dependent on the industry business. I had over 10 years of successful corporate rentals in Alaska. In a small town of Nikiski but near an oil refinery and fishing. We hardly would have vacancies using the oil fields turn arounds and then filling in during fishing season. The last 4 years, I have been working corporate rentals in Tampa Florida which is very exciting due to so many industries from traveling nurses, oil fields, college professors, traveling businesses, sellers that already sold their home and waiting to close, insurance claims (which are my big ones)...etc. I think the most important thing is the find the industry that is most dominant in your area. Not all these industries will work in each area, but I feel you just need to find out what is prominent in your area and link into those businesses.

    [email protected]813-527-1030
    2Reply
  • Jorge VazquezBusiness Member
    Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 679 votes
    5y

    Nadia, I like corporate rentals better than Airbnb because of the type of client you get. I was one of those guys. I was super skeptical initially, but I've been proven wrong my property has been renting for three times as much utilizing the corporate rental strategy. Thank you for your help.

    Graystone Investment Group4.6268 Reviews
    WebsiteView Page
    0Reply
  • Jeffrey Axen
    Member since 2020 · 2 posts · 2 votes
    5y

    I have a corporate rental listing right now and having great success and demand to get it rented. 100% works In certain areas! Would consider trying this route out before going for your typical year minimum lease. Ofcourse got to make sure your house is allowed to do corporate rentals. HOA communities may not allow this! Even check with the city of wherever you live to see if there are restrictions!!

    2Reply
  • Bryan Wells
    Oceanside, CA · Member since 2020 · 7 posts · 17 votes
    5y

    Other than FurnishedFinder (previously mentioned, thanks Bob E!) or calling up local hospitals, ect., how are you finding tenants?

    3Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free