I often get inquiries from landlords as to whether renting out their home furnished and/or as a corporate rental makes sense. Typically this is driven by either a desire for more profit (maybe they have a negative cash flow with the home as a “regular” residential rental) OR by the owner when moving out with the Best Movers Minneapolis and end up having a lot of nice furniture they are unsure what to do with.
Some corporate rentals aren’t really much different from a regular residential rental. Often an employee has a housing allowance and in some cases the lease has to be with the entity paying – being that an embassy or a corporation. In those cases, your lease would be just like any other lease except it would be the company responsible and not the tenant. Running credit checks on a corporation is a bit challenging – you will want to make sure the corporation is a stable one financially. Also, as the lease is with the corporation your ability to go after the tenant for damages will be limited – going after the corporation for damages is likely trickier than a simple small claims court claim.
That being said, you can often find great long term tenants in these situation but each one is different. Do your due diligence to make sure you don‘t get into a situation where the corporation switches out the tenants on a short term basis.
Which brings us to short term corporate rentals. They may initially sound great – above market rent, long lease term and a corporation with deep pockets as the tenant. As the corporation is renting the home with the intent of changing out the occupants on a regular basis you will usually have no control over how many people are staying (and who they are.) While you likely will receive the rental income on time and may get a long term contract the wear and tear on the home will be significant with such a high turnover. Neighbor complaints, especially for condominiums, may be numerous.
In a condominium community the typical minimum lease length is 6 months and homes in condominiums or homeowner associations cannot typically be used for “transient use”.
Another common option is to rent out the home short-term furnished as a normal residential rental. Again, you would likely have issues with a condo association due to short term leases (minimum 6 months.) Even if you don’t have an issue with that, the short term nature will demand a great deal of work on your part. There will be turnover cost between each teant and the tenants will expect the furniture to remain in good condition. they may also expect things like plates and cutlery etc. Between each tenant you will have to make sure all that is clean and in good order and also make necessary repairs. If you have a company do the management and leasing you will possibly end up making LESS money on a short term rental. Short term furnished rentals usually only makes sense where there is a great number of them in the same building or area like a corporate apartment complex or resort area.
We have clients wanting to do this many times and it is usually caused by the current rent not covering the cost. After discussing the pros and cons they usually end up scrapping the idea due to the extra management, leasing and turnover costs. Selling the furniture on craigslist usually gets them a higher return than leaving the furniture in the unit.