As the housing slump drags on, homeowners unable to sell their properties are taking an unusual approach. Instead of taking in long-term renters, many are offering unsold properties as fully furnished rentals for corporate housing.
Since these leases are typically short term, homeowners can easily put their property back on the market should buying activity increase.
Companies benefit because renting private homes can be cheaper and more desirable than traditional corporate housing options.
A host of websites and organizations have cropped up to help homeowners advertise their houses to business travelers and corporations. Corporatehousingbyowner.com now has 14,5000 registered corporate users in search of private home rentals. "The majority (of owners) are disappointed with the market and can't sell their homes," says Eric Smith, president of the organization that launched the website in 2006.
Why the trend is catching on:
•Higher rents. In many cases, the homes came with purchase prices topping $500,000, and the homeowners are finding typical renters unable to cover monthly mortgage costs. Corporations have bigger budgets. The income to homeowners becomes taxable after 14 days, but the financial benefit often is worthwhile.
In 2007, the average rental on a private property rented out for corporate use topped $3,600 for a three-bedroom apartment, according to corporatehousingbyowner.com.
•Flexibility. Most rents are month to month, with an average three-month stay.
•Quality of tenant. A business traveler or an executive looking to relocate often is a responsible renter. "The quality of applicants is wonderful," says Eve Oxford, owner of a design studio for custom rugs, who uses one of the two condos she owns in Atlanta as a corporate rental. "I had a traveling actor from The Lion King and someone transferring from the Nuclear Regulatory Commission," she says.
Vanshaj Bindal has used privately rented homes as corporate housing through his work as a manager at Sapient in Atlanta. "After posting my requirements, I got pretty good response from various agencies," he says in an e-mail. "They helped me find what I was looking for."
Another advantage for landlords is that they usually don't have to worry about unpaid rent.
When Siemens moved Robert Sikellis, 42, from Massachusetts to Germany, he had to decide his next steps quickly. He talked to brokers and realized it would be difficult to sell his home in Dover. He listed it on Craigslist and found an executive from Philips relocating to Boston. The tenant's rent is covered by the company.