Added Value to the One Bedroom Unit

Corporate Renting and what is in demand:

The type of housing most in demand whether the corporate sector or short term sector is the quintessential two bedroom, two (full) bath furnished condo with an attractive electronics package. There are many reasons for this aside from the obvious extra space for guests, the price point for a two bedroom/two bath unit is not all that much more than the one bedroom units.

The most popular area for the business/corporate class is the central downtown core near the convention center, Empress and along Humboldt, Courtney and Broughton streets. This area commands the highest monthly rent.

Generally a 2BR/2BA unit can command anywhere from $2650-3200 depending on size. Owners of one bedroom units recently purchased in the area want to see a good return on their investment and will charge anywhere from $2400-2650 which is very close to the price on a smaller two bedroom.

The single corporate executive faced with the choice of a one bedroom at the above rate and a smaller two bedroom will choose the two bedroom every time.

Owners of one bedroom units suitable for the single executive can add value to their property so that their suites can compete in a market where two bedroom is preferred.

Add Some of All of these to Your Furnished One Bedroom:

• full tier premium HDTV channel package
• attractive electronics package including Blu-Ray DVD player; PVR;and stereo with iPod dock
• a barista coffee machine like Nespresso
• sleeper sofa
• equipped “bar”
• extra TV in the bedroom
• shelving, storage
• correct pricing!!

These extras will make your one bedroom more attractive to the corporate renter especially the single exec who can make this a home. If the building has amenities such as whirlpool, club room, fitness room or more even the one bedrooms can attract renters who will be happy to make it home.

 

Listing with Me

From time to time I have to get proactive and approach homeowners who have furnished rentals and encourage them to list with me.

This can be daunting as many owners feel they can easily rent out their place themselves and either don’t require my services nor do they want to share any revenues in terms of commissions.

If the net to the owner is reasonable I can sometimes add my commissions and fees on top of that rate, if however, the net rate is the actual market value then commissions will have to be deducted from that.

If you are in the rental business over the long term and want good paying, high quality tenants I am a very valuable resource for homeowners.

It does cost to list just as it costs to be ranked in the top 10 for all my search categories. Anyone looking for a downtown furnished rental, executive furnished rental, furnished apartment or other similar long tail keyword phrase are likely to find my site on the first page of SERP. This is key to success especially if you are trying to attract corporate and executive clientele who are used to paying for quality accommodations,

Executive vs. Local Clientele

If you do not have a website of your own or are not listed on any global sites chances are you will not attract the executive/corporate renter. Even Craig’s List, Kijiji etc which are global in scope are still categorized for local consumption. More local folks than the executive set looking for rentals will search these sites.

Benefits of the Executive renter:

• extensive travelers especially on business and are used to premium prices in relation to other world class cities
• are mid to upper level executives, professionals or specialists relocated here by their firm to complete a project or work assignment
• are often homeowners themselves where they live and have a deeper understanding of how to treat your property with care
• never travel with pets
• rents are automatic with the companies often covering the costs
• executives do not want trouble, will cooperate with you (more) and are far less demanding than a local renter

Local renters do not have the same rental budget that the corporate sector has so will not pay as much for your rental. Most local renters especially long term are not homeowners themselves although some may have been in the past. This can make a difference in how your place is treated.

The locals (sometimes) have pets and often a variety of requirements that over time can just plain drive you crazy.  No matter how much or how little rent they are paying they can become very demanding (with some exceptions ) and are not generally as desirable a tenant as an out of town executive.

 

How Much Rent Will the Corporate World Pay?

When I am approached by a homeowner who wants to list with me for the first time or is planning to switch from a Holiday rental to a longer term corporate rental the main thing they want to know is “how much rent” can be charged. Understandable. Once you buy, furnish and outfit a place it’s handy to know what sort of return one can expect. This articles focuses on what the ever-growing corporate sector tend to look for in selecting a long-term furnished rental.

Stay, Play, Work Relax

 

“Value” is in the eye of the beholder – the following are what corporate clientele value in a rental:

• Location
• Location
• Services
• Unit amenities
• Building amenities
• did I say Location?

 

 

Location: 

With Victoria being such a small city one may not expect location to be an issue after all everything here is about 10 or 15 minutes away from downtown with exception of the Western and Northern communities. Nevertheless it is important to the executive client who is new to the city, does not have a “community” except for co-workers and wants to be close to shops, restaurants, business services and city attractions.

Services:
Because the executive has been sent or has relocated here for work he/she will value a “serviced” apartment.  In cases where the company is paying the tariff this will be mandatory. Services such as regular cleaning and maintenance, hi-speed wi-fi with a powerful router, secure/controlled entry, two parking spaces, full office layout (desk, shelving, good office chair, printer/fax), landscaping services where applicable, will attract this type of client. If the unit is part of a rental management service all the better as they will have access to other units when and if needed and will be able to make requests and resolve issues through the rental agent.

Unit Amenities:

First of all a two bedroom unit is far more desirable than a one bedroom even for the single executive. The second bedroom is most useful when family or friends come to visit as these executives are often far from home. The ideal square footage is between 1000-1500 square feet. Although a view is nice, again it is not something the corporate sector will pay more for.

High end finishes such as stainless, granite and wood floors, in vogue for all the newer builds are very desirable – insuite laundry mandatory. The corporate executive looks for a full electronics package (HDTV, full cable package, DVD player, iPod dock, PVR) – a “home away from home”. In addition, lots of natural light or plenty of artificial light for reading or work are also mandatory. Attractive but more important comfortable and sturdy living room furnishings are valued so occupants can lay, lounge and rest just like at home. Antique furniture, decorator pieces that look good but upon which one cannot comfortably lounge are to be avoided. Similarly, expensive art pieces do not add any particular dimension to one’s stay and the corporate sector will not pay extra for them. Save your money and furnish more on a practical basis or provide a good coffee machine instead. Air conditioning is always a plus.

Building Amenities:

The executive class does not seem obsessed with pools, whirlpools or fitness rooms as much as one might think. Although they are nice to have I don’t see them wanting to pay extra for them.Instead a building with front desk concierge, business services (boardroom, photocopy/fax machine) will be more important than a swimming pool. Even more important will be control of the front entry. Corporate tenants will want to have their names on the front call box so that they may accept parcels and let in other service personnel.

That about sums up what the executive class look for in a furnished long-term rental. For units located downtown (Humboldt Valley, adjacent areas of Fairfield, including up to Johnson Street) rates can range from $2350-3000/month for long-term one year leases and $2500-3600 for leases less than one year.

The range depends on how many parking spaces are included, frequency of cleaning services, square footage, office layout,location and the general amenities of the condo/building.

Units located in other areas of Fairfield, James Bay, Old Town are likely to see rents from $2000-2350 for one year leases and $2200-2850 for shorter term stays.

This seems to be the market today.

Numbers can go up or down depending on supply and demand but for the last three years the swing is upwards.

 

Furnished Rental Trends for 2013

Industry Trends and Changes to Watch in 2013

• Mergers and acquisitions. The new economy is beginning to see changes in product line with two noteworthy changes last year. National and Oakwood both acquired other corporate placement companies including ExecuStay from Marriott. It appears that some hotels are getting rid of their corporate accounts and re-focusing on hospitality. This means a huge opportunity for individual home owners as loyal clients of Marriott and the like will now be looking for new rental options in particular the diversity that can only come from private individual owners.
• Vacation rental regulations and taxes. This has affected just about every city in the world where vacation rentals originate. Waikiki has imposed strict regulations regarding holiday homes limiting this type of housing to 30 days or more thus eliminating weekly and nightly rentals.Many cities including Victoria have also imposed these types of rental restrictions through bylaws and on top of that Strata Councils of varying condominiums have also added 6 month and one year minimum rentals and with one stroke have wiped out a good portion of the vacation rental pool.
  What’s really behind these rules and regulations? A combination of factors, from lobbying by Hotel groups and associations to nosy neighbours as local residents often hold a negative view of vacationers in their building or on their block.The tax man also wants his share forcing 14% room and GST taxes on vacation properties in line with what hotels have to pay.

  This trend is not likely to go away as we see local governments implement new
  rules on vacation rentals in the months to come. As more limitations are placed on rentals 30 days or less, offering monthly furnished rentals is becoming one of the only legally viable options for individual owners to generate rental income on their properties AND you don’t have to add tax to it.
  • Corporate housing Profile Changes. Corporate housing has always been a special sector in the larger,extended stay lodging segment. Corporate housing is no longer just for traditional business travelers but has now expanded persons relocating either long or short term to other cities as well as military transfers,real estate transitions,insurance claims, foreign students and local folks renovating.
  This trend means qualifying your ideal renter for your property and decide on the correct fit. It may be that some inquiries are sent to hotels for extended stays because their rental term just isn’t long enough. Why settle for a one month or two month booking when there may be clients out there who want 9, 10 or 12 months.

 

How Long Will the Upside Last?

The upside to furnished rentals has been rising steadily.  Demand for furnished units continues to remain steady with many annual leases renewing. Some local companies plan to bring in more specialists this spring to replace those that have decided to return home as well as extra personnel for projects.

That’s the upside. I just wonder how long it will last. Lots of corporate contracts are ending this spring but many others go on for another year or two. Then what? Will it be back to just the local economy?

If we rely on just the locals demand for furnished units will not be as high nor as long. Often a family will be renovating their home and need someplace to live for a few months while the work gets done.

Let’s hope that the good times continue and as long as these companies can land government and private projects they will be bringing in specialists to complete the job.

It sure has been great having them here.

 

Going From Holiday to Corporate Accommodations

What it Means Going from Holiday to Corporate:

I Love Victoria!

I started out years ago brokering vacation accommodations. I loved it as I got to meet new and interesting people from all over the world. Over time it felt like I was operating my own  boutique hotel. That’s a fantasy a lot of people have that of being an “inn-keeper”, offering hospitality to visitors and of course being an authority on your own neck of the woods. Even putting out the cute soaps and toiletries was fun. Someone showed me a fancy way to display towels in the bathroom which I have used ever since. I enjoyed providing as close to a 5 Star experience as possible.

Every month I would gather up all the tourist brochures and event magazines and place them lovingly throughout the properties for guests to find. The fridge was always stocked with coffee cream, fresh fruit, jam and BBQ condiments and the cupboards with coffee, tea, hot chocolate, seasonings and other little gems.

If you like pleasing people then you might like running your own hotel (as it were).

Then came the changing wave. 2008 – tourism down – way down. Victoria had long depended on the influx of American travelers to fill up hotels and holiday homes and now with the US economy in turmoil we felt the pinch here. No more high prices for daily or weekly stays. Americans were still coming up here but not as many and the ones that did come bargained hard for their accommodations. Homeowners were forced to slash their holiday rates to attract business.

Even the “snow birds” had long since disappeared due to the strong Canadian dollar which could fetch a top luxury suite in Palm Springs or Arizona – were you can be assured of sunshine everyday. The following couple of years fared no better. Vacation rentals became cut-throat in pricing and many people sold just to get out of it as it had become extremely unprofitable.

Then came 2010 a sudden influx of British engineers brought to Victoria for a 2-3 year working contract on our submarine. By 2011 other international firms began bringing in their own personnel and changed the landscape overnight. The properties that were summer holiday places in August became corporate accommodations by September.  Four other international firms who have offices here also imported a variety of specialists, consultants and professionals to book up every furnished property in sight (downtown core). This trend continued well into 2012 with many leases since renewed and creating a shortage of both holiday and corporate accommodations. At this time most properties have gone “corporate”.

Until that happened I never knew how much I needed a break from running my “hotel”. No more daily or weekly turnovers to attend to, no more constant tour of the buildings, having to be everywhere at once to check people in and out and a myriad of other minutiae that consume your time on a daily basis.

Going corporate meant getting unchained from necessary tasks that don’t pay. Tenants in for the long term require a lot of time in the beginning to get settled but over time don’t drain your energy and you don’t have to worry about abrupt turnovers, restocking of anything and other extra duties.

Executive Client

Suddenly I had more time to do what any business owner should be doing – expanding. Now I could make the appropriate partnering contacts, follow-up more closely on my leads and begin pursuing new inventory which even at this point is getting low due to corporate placements.

I still love holiday guests and love to offer good old Victorian hospitality but one unit with that going on is enough. I am enjoying the longer term rentals much more as I get time to develop my business, learn new business skills and maybe even have a life.