Executive rentals – they give business travellers and upscale short-term renters a place to stay that is cheaper than most hotels, and they provide landlords with a great stream of income. If you are buying an investment property, moving out of your current home or feeling tired of dealing with the long-term residential rental market, consider turning your property into an executive rental.
Here is everything you need to consider before you get started in executive leasing:
Executive rentals can serve business travellers, or they can serve short-term renters such as families building new homes, executives needing places to stay when they first move to town or other upscale renters who need short-term accommodations. Executive rentals appealing to the former group are best situated in large cities or business hubs, but if you do not live in an area that attracts many business travellers, you can market to the second group.
Unfortunately, if the property is in a small sleepy town that rarely has anyone moving in or out, it is not an ideal location for an executive rental. As a rough guide, use the number and quality of extended stay hotels in the area to determine if there may be a market for an executive rental.
It is standard for executive rentals to be furnished, and while furnishing yours, you want to think about style and comfort but also business amenities. Business travellers need high speed internet, cable TV and an ample number of outlets for charging devices. You may also want to add a large conference table or desks for working and meetings.
If you are trying to attract upscale short-term renters, you want a fully stocked kitchen and inviting bedrooms. However, unlike a vacation rental, you do not have to have lots of beds to accommodate as many sleepers as possible. Instead, you just need to create a space that looks like a nice short-term home for a couple or family.
To price your executive rental, look at the cost of rentals in your area and extended stay hotel rates. Ideally, your rent should be more than the former and less than the latter. Offer higher rates for day or week rentals and slightly lower daily rates for multiple-week or month-long rentals.
If you have never owned an investment property before, keep in mind that you can write off your expenses on your tax return. Essentially, you declare the rent payments as income, but you can write off the entire costs of running the rental including utility bills, advertising costs, repairs, landscaping and even interest on your mortgage loan.
Ultimately, if you have more write-offs than income, you can use the write-offs to lower your taxable income (from your regular job and other income sources) and your overall tax burden
When you own a residential rental property, you only have to market it between renters. If a renter stays for a year or several years, you don't have to worry about it for a long time. With executive rentals, however, you are going to have more turnover, and as a result, you are going to need to advertise your rental property more often.
There are basically two ways to market your property. You can use an online listing board for executive or short-term rentals, or you can hire an executive leasing company to take care of marketing, renter screening and other issues such as cleaning, turnover, rent collection and property maintenance. In most cases, the cost of paying someone to market your property is made up by the fact that leasing professionals know how to find reputable renters quickly, meaning that your property is full more often.