Introduction
Do you work in a field that makes you travel a lot? Or even if you are a multinational business owner, this is the right place for you.
Making travel arrangements and managing hotel bookings often sounds like a good idea. However, it becomes hectic when you have to do it almost every other day.
In addition, if the hotel stay turns out to be a disappointment – there is not much you can do about it since you are dependent on the hotel management.
However, a new trend has risen over the past few years: Corporate let.
Corporate let is a type of rent designed especially for tourists travelling due to work commitments. It allows them to rent the property for both short-term and long-term contracts. Therefore, corporate let stands somewhere between the traditional long-term lease and short-term bookings.
However, before you begin to experiment with corporate let, it is necessary that you familiarize yourself with how the latter works.
What is Corporate Let?
As described earlier, the primary role of corporate let is to assist the tourists looking forward to renting a place for their stay. The duration of the visit varies from client to client, but the property is available for as long of a duration as one wants to book.
The main idea of corporate let is summarized as follows:
A company in charge rents the desired property from its original landlord. The property’s operations and management then come into that company’s hands. It then lets it out for short-term and long-term contracts with different tourists or renters.
Hence, the landlord has a fixed renter who pays them a fixed monthly rent, but the company in charge has different renters who pay according to their duration of stay.
Often, such companies have contracts signed with other companies whose employees travel frequently. The company practising corporate let is also responsible for the maintenance of the property. This includes cleaning, fixing damages brought about by renters, and delivering the keys to each renter.
If you want to become a letting agent in corporate let, the “letting and management agent development course” is a requirement. Click here for further details.
In corporate let, a corporate or commercial tenancy agreement is signed between the tenant company and the landlord instead of the regular AST (assured shorthold tenancy) agreements.
What are The Basic Rental Procedures
When a tenant begins to look for a property, he compares the features offered by different accommodations – the most basic being the monthly rent. Others may include electricity safety, gas safety, and security Deposit.
A lease contract, previously called the AST agreement, is then signed between both parties. The rental procedures within the Corporate let sector discussed ahead are also similar.
What is a Corporate Let Agreement?
In the traditional letting type, properties are rented to individuals or families. Thus, tenancy agreements are signed between the landlords and these people.
On the contrary, Corporate Let is a form of rent where lease agreements are signed between the landlords and companies taking charge of the property. Thus, the fact that these companies are the tenants in corporate let is what differentiates it from traditional renting.
A corporate tenancy agreement, also known as the commercial tenancy agreement, is signed between both parties. Typically, the company becomes in charge of the property for about 3 to 5 years.
Who is a Corporate Let Landlord?
With different types of tenancy available, all landlords tend to target different individuals. Some may prefer single people, while others may want families or students. However, some landlords, in the form of councils, provide social housing. The social housing white paper protects the rights of its residents.
Similarly, few landlords tend to target the corporate sector.
In the world of corporate let, the original owner of the property is called the corporate let landlord. The rental agreement is signed between him, and the company looking to take charge of the property.
Landlords – Pros and Cons of Corporate Let
Just like any other business, Corporate Let also comes with its own assets and liabilities. Evaluating the pros and cons is essential when deciding on a corporate let if at all and to what extent.
Pros of Corporate Let
The advantage of the method for a landlord typically is related to the reliability of the method as a result of your workload being reduced as you outsource your rent to another company.
1. reliable tenant
The landlords sign the lease agreement with companies instead of individuals for tenants.
Most of the companies who work in this sector are renowned and have huge turnovers. They would not risk their reputation under any circumstances. Therefore, reliability is guaranteed.
2. Guaranteed rent
Regardless of the fact that the property is rented out or not, the companies are bound to pay the monthly rent to the landlord. Since the companies adopting this approach are often well-off and well-maintained, the monthly rent is guaranteed. Therefore, this is an additional benefit brought about by corporate let.
3. Stress-free approach
For landlords who are looking forward to adopting a stress-free approach – corporate let is the best proposition available.
From the collection of rent to the maintenance of the property – the company in charge is responsible for all. In case of any damages, the company will fix them. Weekly cleans, delivery of keys, and customer complaints – the landlord has to deal with none of it.
In fact, the rent is transferred into their bank accounts monthly without any delay.
4. Huge Market
As multinational businesses are becoming more common, such companies prefer to provide any relocated or travelling employees with good accommodation. Corporate let, therefore, is their first preference.
In the previous years, the market has shown tremendous growth – and the demand only continues to rise in each coming year.
If you want to let your property and introduce yourself to the world of corporate let, click here.
If you want to become a letting agent, the “letting and management agent development course” is a requirement. Click here for further details.
Cons of Corporate let
When doing corporate let. You have to give a lot of your control over to whoever is renting your premises from you. This results in you having to maintain a good product for your renters which can be a headache if not managed correctly.
1. Pristine Property Conditions
When choosing a rental property, companies who work with Corporate let look at many things. They often require the property to be in pristine conditions. Since the people renting them would be professionals or businessmen, they have comparatively substantial budgets.
Therefore, services like cable and internet are often a must. It is common for each company to have its own relative requirements.
2. Taxes and Administrative Support
Each company in charge has its own administrative rules that a landlord must abide by once the agreement has been signed. Such may include the provision of monthly invoices and receipts.
3. Personal use is prohibited
Usually, the landlord often uses the rental property for his own use, for example, to accommodate friends or family upon a visit.
However, for properties under corporate let, a landlord is no longer eligible to make any personal uses of the place. Also, the bookings are so frequent that the property remains unavailable for most of the year.
4. Reduced rent
As you can imagine, because you are giving over the ability to bring on renters to your property, you will receive a lower rent than if you were to rent out the property to commercial or residential clients yourself.
So there is a large financial disincentive to doing a corporate let in this way.
What Properties Do The Corporate Let Companies Look For?
These companies tend to look for apartments, flats, and other forms of residential properties that are frequently rented. A lot of factors are considered before any decision is made.
Corporate clients prefer high-class properties that are well-maintained and furnished. Companies value flawless decor, a tidy appearance, and a comfortable aesthetic. Any appliances installed should be high-quality and modern. For example, efficient water heaters.
A fridge, microwave oven, dishwasher, and thermostat are almost always necessary. Similarly, other forms of technology, including a big screen tv and reliable cable or internet connections, are required.
A property’s location is also given a lot of weightage. Those with popular, five-star restaurants nearby are preferred. To summarise, corporate let companies look for places that fulfil the standard requirements of an average middle or high-class professional.
Opportunities For Corporate Let Tenants
A corporate let tenant is a professional or businessman who rents the accommodation from the company in charge of the property.
The advantages brought about by corporate let for such tenants are listed below:
1. Alternative for hotels
Corporate let properties are considered a good alternative for hotels.
All similar services are provided to the tenant. For example, weakly cleans, fresh sheets and towels, and customer care services. It saves one from the hustle of dealing with the reception desk, check-ins, and check-outs.
Also, these properties often come with built-in kitchens so the tenant can enjoy the comfort of their own cooking. Otherwise, other alternatives are made available.
2. No violation of Privacy
In these properties, the tenant has the whole place to themself, so no violation of privacy by staff or management occurs. Therefore, the intimate feel of a private place is conserved.
3. Single Invoice
In most cases, the tenant signs only one contract for his complete stay. Similarly, only one invoice is handed to them at the end of their stay.
This invoice includes the cost of all the payments that must be made: administrative fees, utility bills, customised cable or internet packages, etc. The utility bills will have a fixed cost instead of one based on the usage of appliances.
4. Customer care
The companies practising corporate let are quite concerned with the comfort of their tenants. They not only maintain a property according to the renter’s standards but also take care of any mishaps that may occur during the stay.
For example, if a tenant is unsatisfied with their accommodation, it can often be changed without additional costs.
5. Location
The location of a property is carefully considered before the rental procedures are finalised between the company and the landlord in corporate let.
Areas with good restaurants and food courts nearby are preferred. The company would always look forward to five-star restaurants for high-class clients. Access to outlets like convenience stores, pharmacies, hospitals, and leisure facilities is preferred.
The corporate let companies allocate the accommodations such that their location is often close to the business or work premises of the professional. Also, the availability of suitable transport is another plus point. Thus, convenience and comfort are both guaranteed in corporate let.
The Major Issues Concerning Corporate let
As reiterated throughout the passage, companies tend to look for well-furnished and well-maintained apartments. However, this requires a lot of capital and time – which many landlords opting for corporate let may not have. Similarly, this cost is often much greater than the capital that would be needed to maintain properties in the private rental sector.
Although this does not often happen in the corporate let sector, the companies can sometimes end the contract early if they do not get enough tenants. Likewise, others may call a halt to the monthly payments. This disrupts the Property Planning of the landlord and may pause the working capital.
Why is Corporate Let Gaining Popularity?
Corporate let is a rental strategy most convenient to landlords who want a stress-free and hustle-free income in their hands. Once the contract is signed between both parties, the company is bound to take care of all the maintenance and services concerned with the accommodations.
This significantly reduces the responsibility of a landlord, all while a fixed income is handed to them each month.
Therefore, as awareness is spreading around the globe, more and more people are taking an interest in corporate let. The sector not only promotes growth but also widens the availability of options to yield investment off a property.
Conclusion
The corporate let is the best choice for property holders who own various properties in different states or countries. The main reason is the lessened responsibility the landlord then has to bear. He is no longer responsible for providing the costs for fixing any damages or problems, i.e. an appliance that stopped working.
This way, your properties in different countries are looked after, maintained, and furnished with time. All while you get to remain stress-free about them. Since these companies practising corporate let cannot afford to lose their clients, the chances are very low that you would encounter fraud or any sort of nuisance when dealing with them.
However, at the same time, the corporate let comes with its own liabilities. Provision of Property documents, keeping up with the class use order, and submitting any required proof of ownership are some examples of the latter.
The concept that a property can be rented out for much more money with reduced involvement in the rental procedures may be very tempting for many landlords. However, one should deeply familiarise themselves with how the corporate let functions before taking an immediate decision.
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