It’s no secret that I’ve been a huge proponent of using Airbnb as a side hustle. I’ve always tried to convince my friends who own a home to start hosting on Airbnb, even if it’s just their spare bedroom. After all, hosting gave me a nice savings cushion that allowed me to quit my corporate job in early 2017.
Now that I’m more determined than ever to not go back to the corporate world, I started looking at all of my side hustles to see how I could bring in more cash without increasing my effort. After doing some research online of different ways to make money with rental property, I started looking very seriously at corporate housing and it’s pros and cons.
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Why I Chose Corporate Housing over Airbnb
It quickly became apparent that I could double or even triple my passive income profits by focusing on corporate housing instead of Airbnb. Once I did a bit more research into the ins and outs of corporate/furnished short term rentals, I decided to deactivate my Airbnb listing . In fact, I’ll be hosting my final Airbnb guest this weekend.
Reasons Why You Make More With Corporate Housing
People are willing to pay a premium for short term, furnished rentals for a very good reason:
Most landlords don’t want the risk of not being about to rent out their property, so they try to secure a tenant for as long as possible.
This is particularly the case if a landlord has property in a city with a lukewarm rental market. It’s not only risky, but if you take into account the cost of repairs, cleaning, and advertising that’s involved with getting your property ready for a new tenant, it can be an expensive and time-consuming process if you have to turn over your property multiple times in one year.
So why do people pay more for corporate housing / Airbnb?
- most landlords focus on long term rentals, and
- most properties are unfurnished
This means that in the scheme of available rentals, very few are furnished. Of that number, there are even fewer properties that allow short term leases.
Because of this very limited availability, renters are willing to pay a premium.
Listing My Property as a Furnished Rental
After I had decided that I’d give furnished housing a try, I listed my property on sites that targeted business travelers and other people looking for furnished housing, such as Corporate Housing by Owner.
I also posted an ad on Craigslist to increase exposure, and it’s a bonus that it’s free.
How I Priced My Furnished Rental
I decided to list my townhome at a price that would not only cover my mortgage payment and utilities, but would also cover my car payment, insurance, and fund my monthly entertainment budget. I initially thought my target price might be too high, but once I saw what other furnished rentals were going for in the Seattle area, I felt like the monthly rent I was asking was completely reasonable.
(If you have some time on your hands, go to Corporate Housing by Owner and check out how much well-furnished rentals are going for in your area. You’ll be shocked!)
Landing a Tenant
After a week of listing my property, I still hadn’t received any inquiries and that started making me a little uneasy. Ah, gotta love being disappointed when you don’t have instant gratification – right?
Several days later I received TWO very serious inquiries from prospective tenants.
Potential tenant #1
- She was putting her house on the market in the next 2-3 months and needed a place to live until she found something else to buy. The hot rental market in Seattle meant that her home would likely sell within 3-5 days. On the flipside, this also means that she could easily spend anywhere from 3 months up to a year until she found a home where her offer might be accepted. No joke. I have a good friend who has lost out on 18 different offers. This hot real estate market is a beast!
- Though the availability date of my townhouse was earlier than she needed, she loved the house so much that she was willing to sign a lease 2 months before she actually needed to move in.
Potential tenant #2
- A couple who are in town while the husband manages a construction project.
- The wife mentioned most furnished rentals weren’t available until 3 months down the road. (And reiterates why you should be looking into corporate/furnished rentals if you haven’t already.)
Within two weeks of posting my property, I signed a contract with prospective tenant #1. The amount of monthly passive income I’m making with corporate housing exceeds even my best month on Airbnb by $900. I wish I’d decided to do this sooner!
Have you ever considered doing corporate housing instead of a traditional lease, or Airbnb? Why or why not?
This post was proofread by Grammarly
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