How to Start and Run a Successful Corporate Housing Business

Are you an entrepreneur looking for a lucrative new business opportunity? If so, starting a corporate housing business could be ideal. Corporate housing, which provides short-term housing for business travelers, is a fast-growing industry. According to IBISWorld, the corporate housing market in the U.S. generates over $3 billion in revenue per year and has grown at an average rate of 3.4% over the past five years.

If you're interested in real estate, hospitality, or property management, a corporate housing business could be a great fit. You'll get to work with business professionals from around the world and help make their travel experiences more comfortable. You'll also have the potential to generate a healthy profit margin if you can build a portfolio of desirable furnished rentals.

However, starting any business is challenging, and the corporate housing industry does come with risks and barriers to entry. In this blog post, we'll explore how to start a corporate housing business, including writing a business plan, finding properties, marketing your services, and more. By the end, you'll know if this exciting industry is right for you and how to get your own corporate housing business off the ground.

The Corporate Housing Market Landscape

The target audience for a corporate housing business is business travelers, ranging from middle managers to executives. The specific market you target will depend on the properties you offer and locations you serve. You could focus on more modest, budget-friendly units for those on shorter-term assignments or luxury, fully-furnished rentals for high-level executives.

Most corporate housing businesses operate locally, but some do work with national chains and serve business travelers from around the country or world. The market itself spans from budget to high-end. According to surveys, around 60-70% of corporate housing is mid-range, while 20% is luxury or high-end. Only about 10% of the market is considered budget or economy class.

So you'll need to determine if you want to target budget, mid-range or luxury business travelers in your local market or on a wider scale. The specific properties and locations you choose, as well as your marketing and pricing strategies, will depend on the target audience and market segment you aim for. But in general, the corporate housing industry holds opportunity for businesses at multiple price points and geographic scales.

Your Product: Furnished Short-Term Rentals

The core product for a corporate housing business is furnished short-term rental housing for business travelers. You'll need to acquire residential properties, furnish them attractively, and rent them out for stays ranging from a week to several months. To stand out, focus on amenities like fast WiFi, comfortable bedding, weekly cleaning services, and a convenient location for your target clients.

You'll deliver your product directly to clients who book rentals through your website or over the phone. They'll access the properties with keys or keypad codes you provide. It's important to make the booking and check-in process as seamless as possible. You should also be available 24/7 to handle any issues with the properties during a client's stay.

Developing your product will involve finding desirable properties, determining furnishings and amenities based on your target market, setting competitive rental rates, and establishing clear policies and procedures for booking, payments, check-ins, cleaning, maintenance, and more. You'll need to make sure every property in your portfolio meets the highest standards of quality so you can deliver an excellent experience for every client.

The Economics of a Corporate Housing Business

The main costs for a corporate housing business are acquiring and furnishing rental properties. You'll need to invest in residential real estate, which can vary significantly in price depending on your location and target market. You'll also need to furnish each unit with items like beds, linens, kitchenware, electronics, and decor to make it comfortable for short-term stays.

Your cost of goods sold will include expenses like mortgage or rent payments, property taxes, insurance, utilities, cleaning and maintenance, and furnishings. These costs will largely depend on the specifics of your properties and business model. You can aim to keep costs lower by renting in less expensive areas or at higher occupancy to generate more rental income.

For pricing, you'll need to consider your target audience and competitors' rates, as well as your own costs of goods sold. Most corporate housing rentals are priced per week or month. According to industry surveys, weekly rates average around $165 to $325 for a one-bedroom, mid-range unit. Luxury or long-term rentals of 3 months or more will be on the higher end of that range or even higher.

To maximize profits, you want to price as high as your target market can bear while still remaining competitive. You'll also need to account for seasonal changes in demand which can impact occupancy and rental rates. With the right combination of desirable properties, reasonable costs, and strategic pricing, a corporate housing business can generate healthy profit margins of 20-40% or more.

Marketing Your Corporate Housing Business

To attract clients and fill your rental properties, you'll need an effective marketing strategy for your corporate housing business. Some of the top approaches include:

•Search Engine Optimization (SEO): Optimize your website and content for search engines like Google to rank higher in results for terms like "corporate housing" and "[your location] furnished rentals." Focus on your page titles, content, backlinks, and page speed.

•Pay-Per-Click (PPC) Ads: Run targeted ads on search engines and social media to reach people searching for corporate housing. Choose your keywords and budget carefully to maximize results.

•Social Media Marketing: Build a social media presence on platforms like Facebook, LinkedIn, and Instagram. Post listings for your properties and share content about your local area and corporate housing in general. Engage with followers and run paid social media ads.

•Email Marketing: Start an email newsletter to stay in touch with past and potential clients. Share blog posts, special offers, and new property listings. Offer a discount or promotion for subscribers to incentivize sign-ups.

•Direct Outreach: Contact local businesses, travel agencies, and relocation companies to form partnerships. Many receive requests for corporate housing and can refer clients to you. You can also join your local chamber of commerce and hospitality associations to network.

•Advertising: Place ads for your corporate housing business on industry websites, local radio, newspapers, and magazines. Sponsor relevant podcasts, blogs, or events. Advertising allows you to reach a wide audience and raise brand awareness, though it can be expensive, so start small and scale up as your budget allows.

An integrated marketing strategy that combines multiple approaches will be most effective for promoting your corporate housing rentals, attracting new clients, and building a successful business. Stay up-to-date with trends in digital marketing and corporate housing to keep improving your results over time.

Sales Strategies and Processes

To generate sales for your corporate housing business, you'll need to make it easy for potential clients to find, evaluate, and book rentals that meet their needs. Some key sales strategies and processes include:

•An informative yet easy-to-navigate website. List details for each rental property like location, amenities, number of rooms, and photos. Have an online booking system so clients can check availability and reserve rentals 24/7.

•Responsive customer service. Be available to answer questions and handle bookings over the phone during business hours and via email 24 hours a day. Make sure all communications are prompt, professional, and helpful.

•Streamlined contracts and paperwork. Have clients sign a standard lease or rental agreement to formalize bookings. Keep paperwork minimal but be transparent about policies, rental terms, and fees. Offer electronic signature options for a faster, more convenient process.

•Competitive and flexible pricing. Set rental rates based on your costs and local market rates for corporate housing. Consider offering weekly and monthly rates, as well as discounts for longer stays. Be open to negotiating for repeat clients or during off-seasons.

•Ongoing client relationship management. Check in with clients during their stay to ensure the rental is meeting their needs. Ask for reviews and testimonials after they depart which you can use in your marketing. Maintain contact with repeat clients to encourage future bookings.

•Partnerships with businesses. Form alliances with companies who frequently have employees travel for work. Offer their staff special rates or promotions for booking your corporate rentals. Cross-promote to each other's audiences. Partnerships are an easy way to drive more sales and fill more vacancies.

With the right strategies and processes in place, you can build a steady stream of leads, convert more prospects into paying clients, deliver excellent service, and maintain a high occupancy rate across your portfolio of corporate housing rentals. Focus on a customer-centric approach, competitive advantage, and win-win partnerships and your corporate housing business will thrive.

Operations and Execution

To successfully operate a corporate housing business, you need efficient systems and processes to oversee your rental properties, serve clients, and handle daily tasks. Some key areas to address include:

•Property management. Inspect properties regularly and conduct maintenance or repairs as needed. Work with cleaning and landscaping services to keep units in prime condition for rentals. Manage booking calendars and coordinate check-ins/outs.

•Client services. Respond to inquiries, book rentals, and handle paperwork. Conduct orientation for new clients on the property and local area. Be available to address any issues that arise during stays. Manage billing and security deposits. Send surveys after check-out to monitor satisfaction.

•Staffing. As your business grows, hire employees to help oversee properties, work with clients, handle marketing and sales, and take care of daily administrative tasks. Provide training to ensure high standards of quality and service.

•Accounting and legal compliance. Keep accurate financial records, accounts payable/receivable, and tax documentation. Work with an accountant to file business and property taxes. Maintain proper insurance and licenses for operating your corporate housing business. Stay up-to-date with laws regarding short-term rentals, tenant rights, health and safety codes, and more.

•Technology integration. Use property management software to list rentals, track bookings, and communicate with clients. Leverage accounting software to manage finances. Invest in high-speed WiFi, smart thermostats, keyless entry locks, and other tech to streamline operations and provide convenience for clients.

•Continuous improvement. Monitor key metrics like occupancy rates, client satisfaction, and profit margins. Look for ways to optimize your operations through new technologies, streamlined processes, expanded marketing, improved amenities, and enhanced customer service. Stay on top of trends in the corporate housing industry to keep your business competitive.

With efficient operations and solid execution, you can ensure a high-quality experience for corporate housing clients, maximize profits, and build a reputable business. Focus on organization, responsiveness, compliance, and leveraging tools and technology to simplify processes wherever possible. Continuous review and improvement will help your corporate housing business achieve sustainable success.

Legal Disclaimer

Please note that starting and operating a corporate housing business requires compliance with all applicable laws and regulations regarding property rentals, tenant rights, zoning, health and safety, and more. The specifics will depend on the location of your rentals and business. Be sure to research requirements for business licenses or permits, short-term rental ordinances, property usage, tenant screening, security deposits, and liability insurance in your city or county before launching your corporate housing business. Failure to comply with legal obligations could result in penalties, legal issues, or even having to shut down your business. It is strongly advised to consult with a real estate attorney to ensure you understand and follow all laws properly. The information in this blog post should not be considered legal counsel or advice.

Conclusion: Start Your Own Corporate Housing Business

If you're an entrepreneur interested in real estate or hospitality, starting a corporate housing business could be an exciting and rewarding endeavor. The demand for short-term furnished rentals is growing, and with the right properties and approach, you can build a successful business serving business travelers in your area.

However, it does require thorough planning and hard work. You'll need to develop a business plan, find and finance rental properties, establish your target market and product offerings, set competitive rates, and implement marketing and sales strategies to attract clients. You'll also need to ensure efficient operations, high quality standards, and compliance with all legal obligations regarding property rentals and business ownership.

Starting any company is challenging, but for those willing to put in the effort, a corporate housing business can be a profitable and scalable venture. If you're up for an opportunity in real estate, ready to provide an needed service, and committed to excellence and customer satisfaction, then starting your own corporate housing business could be for you. With desire, dedication, and the advice in this blog post to guide you, you have the potential to build a successful company in this growing industry.