In the ever-shifting world of UK property investment, let's talk about an opportunity that's a little more creative than your vanilla buy-to-let strategy: corporate lets via the rent to rent approach.
These aren't your typical rentals – they're a whole different beast. If you're up for exploring the area further, we've got 8 chunky tips to share, all aimed at helping you thrive in the corporate let field.
Whether you're a new or established property investor, an experienced landlord seeking a new challenge, or you're simply keen to learn more about UK property rental strategies, this article will arm you with the best tactics to evaluate and operate your next corporate let opportunity.
What is a corporate let in the UK?
In the UK, corporate lets stand as a unique segment of the property market, catering specifically to businesses instead of individual tenants.
These arrangements involve leasing a property to a company, which then uses it to house its employees, often on a short-term basis.
Corporate lets differ from conventional residential rentals, requiring properties of exceptional quality, readiness, and meticulous upkeep to meet the exacting standards of your stereotypical corporate customer.
Tenants most often demand the following when it comes to their company's apartment that they intend to stay in:
- Furnished properties with modern amenities and impeccable maintenance.
- Convenient locations with efficient transport links in desirable neighborhoods.
- Reliable and fast Internet connectivity – everyone hates slow download speeds and buffering videos!
If executed without shortcuts and according to a well-thought out plan, property investors entering the corporate let sector can anticipate higher rental returns and, frequently, long-term agreements.
Success here hinges on adaptability, property quality, and expert management, making it a rewarding but specialised venture in the diverse UK property landscape.
How do corporate lets work as a rent to rent strategy?
Corporate lets, as a rent to rent strategy, offer a distinctive avenue for property investors in the UK.
These arrangements involve renting properties and then subletting them to corporate clients.
From a cash flow perspective, subletting a property to a company and its staff through a formal rent to rent agreement with the landlord, can provide an excellent return. Not only for you, but also the landlord. Needless to say, you're not needing to put the type of cash down to actually purchase a property either, so the entry point is a lot easier in most cases versus acquiring a piece of real estate outright.
Yet, this path demands adaptability, a commitment to property quality, and expert management to meet the stringent standards set by your stereotypical corporate customer.
So, what can you do as a property investor to ensure your corporate let investment gives you a great ROI?
Let's dive into the 8 ways you can master the company lets game within the R2R model.
1. Tailor your property to corporate standards
To excel in this field, your property must meet the elevated expectations of the short-term and long-term company let client.
Corporate tenants aren't just looking for a place to crash – they seek a comfortable, efficient living space that complements their professional lives.
Begin by ensuring your property is well-furnished and exudes sophistication. Think modern appliances, quality fixtures, and impeccable decor. Consider upgrading to hardwood floors or high-quality carpets.
Design a space that justifies a premium rental spend
In the kitchen, provide essential appliances like a dishwasher, washer-dryer, microwave, and a spacious fridge. And, don't forget a robust and reliable internet connection – a non-negotiable for any corporate tenant as we've already pointed out!
Creating a space that aligns with corporate standards not only increases your chances of attracting such clients but also justifies the premium rent you can command.
Tailoring your property to meet these expectations is an investment that pays off in the form of long-term agreements and higher returns on your investment. Remember, it's not just a property; it's a professional haven.
2. Long-term agreements for stable cash flow
Stability is your best friend when it comes to a corporate let. The key here is to secure long-term agreements that provide a reliable cash flow in the form of profits and more income for you.
B2B clients often seek accommodation for extended periods, and offering them this security can be a game-changer.
Why are long-term agreements so vital? Well, they keep your cash flow steady and predictable. A simple concept, but not easy to execute.
Play the long game and sleep better at night
With a multi-year contract in place, you won't have to worry about constant turnover and the associated costs and efforts. Instead, you can plan your finances and investments more effectively, knowing that you have a guaranteed income for the foreseeable future.
Securing these long-term agreements is your ticket to financial peace of mind. It's all about minimising the uncertainty in the often unpredictable world of property investment. So, when you're venturing into corporate lets and business accommodation, aim for those multi-year contracts to keep the cash flowing steadily into your pocket.
3. Quality maintenance and quick repairs
Maintaining your property in top-notch condition is a non-negotiable. Please don't take shortcuts here!
This isn't just about appearances – it's about ensuring everything runs smoothly for your corporate tenants. Quality maintenance and prompt repairs are your golden ticket to a strong and healthy relationship with your corporate client, as well as their employees – i.e. your tenants.
Corporate clients expect a flawless living experience, and they're willing to pay for it. So, invest in regular maintenance to keep your property in tip-top shape. This includes everything from fixing minor defects to monitoring the technical aspects of the property. A weekly cleaning schedule is essential, along with regular property inspections.
Don't make your tenants wait for repairs
Being responsive to repair requests is equally crucial.
Corporate tenants often have high standards and tight schedules. They can't afford to wait around for a malfunctioning appliance or a leaking faucet to be fixed.
Ensure you have a reliable system in place for quick repairs, ideally within 24 hours. This level of service not only keeps your tenants happy but also maintains the integrity of your property and even your own individual reputation.
4. Reliable Internet and modern amenities
Yes, we have just mentioned reliable Internet connectivity for the third time!
Arguably, this is the most important tip. In the world of remote work and working from home, can you think of anything worse than your corporate let tenant not being able to join their important Zoom call because the Internet isn't working? Eww, just don't go there...
Offer WiFi connectivity but also a physical cable connection too as a backup. These are really non-negotiable, as is a good TV setup, possibly with satellite channels. Remember, your property isn't just a home; it's a workspace for these professionals.
Cutlery and pans to cook with make it easier to settle in
The devil may be in the details, but the delight is in the amenities.
Modern appliances are a must, so ensure your property boasts a dishwasher, washer-dryer, and a microwave. The basics, like a fridge, freezer, and oven, are a given. And don't forget the small kitchen essentials like cutlery, crockery, and pans.
Make your tenant's life easier – don't leave them hunting for non-existent saucepans.
5. Prime locations for convenience
Location, location, location – you've heard it a million times, but in the world of the corporate let, it's a mantra to live by.
Prime locations are your secret weapon for attracting and retaining corporate clients.
Think about it – your corporate tenants have busy lives and tight diaries filled with meetings for the most part. They need easy access to their workplace, and they appreciate convenience.
So, when selecting properties for corporate lets, opt for prime locations. Look for areas with excellent transport links, whether it's a stone's throw from a train station or bus stops.
Convenience goes beyond the daily commute
Corporate clients enjoy the little luxuries of life, so make sure your properties are surrounded by essential amenities. Think supermarkets, shops, and leisure facilities. These elements enhance the living experience and make your property a top choice.
Prime locations offer you a competitive edge in the corporate let market. They make your property more desirable, attracting long-term agreements and premium rents. When scouting for investments, keep the mantra in mind – location matters and it's not just about how close to the office you are.
6. Professional property management
Having a reliable property management system in place can seriously help avoid a lot headaches on your side.
It's not only about the property itself – it's about the experience you offer your corporate clients for their business accommodation. This isn't too dissimilar from how you might operate a serviced accommodation business, i.e. getting professional support in place to run it properly.
Professional property management ensures that everything runs like a well-oiled machine. It starts with being responsive to your tenant's needs, from answering their questions to addressing any emergencies promptly. Remember, corporate tenants often have busy schedules, and they rely on you to keep things running smoothly.
Think about hiring a true property management company
A professional property manager takes care of the nitty-gritty details.
They handle regular inspections, ensuring the property stays in top condition. They coordinate repairs and maintenance, ensuring your corporate clients enjoy a hassle-free experience. It's about providing a level of service that exceeds expectations.
Investing in professional property management is an investment in your property's reputation and your success as an investor. It's an area that can help set you apart.
Don't underestimate the power of a well-managed property.
7. Guarantor clauses and thorough tenant checks
"I don't care who my tenant is", said absolutely nobody.
If you want to become a successful property investor, then you need to ensure you have good tenants that take care of your place, almost like it's their own home.
Let's break it down. Corporate let tenants, while often responsible, may still be individuals, and circumstances can change.
To safeguard your investment, consider including guarantor clauses in your agreements. These clauses make an individual – often the director of the renting company – personally responsible for the rent and any damages.
Protect yourself and your rent to rent investment property
It's an extra layer of security for you, but it also gives your business accommodation customer something to think about when agreeing to what staff to check-in to your property. You don't want them putting anyone through your door.
Before welcoming any tenant, corporate or not, make sure to conduct thorough tenant checks.
This includes reference checks, credit checks, and perhaps even background checks. Knowing your tenant's history and their company's financial stability provides peace of mind.
8. Streamlined communication and transparency
In the business to business sector of corporate lettings, these qualities can make all the difference to winning deals and generating impressive cash flow.
Imagine this:
- You're dealing with a multinational corporation looking for accommodation for their employees.
- They have high expectations for communication and transparency.
- They want to know that they can reach you easily, get quick responses to their inquiries, and have a clear understanding of the rental terms.
This scenario is not uncommon at all. We've barked on about the high expectations and demands the corporate let customer has – you really need to be ready and to communicate openly and quickly.
Provide multiple channels for inquiries
Phone, email, WhatsApp, Facebook Messenger, X.com, Slack, Microsoft Teams... you name it! Perhaps a dedicated online portal to really stand out from the crowd.
Offer any option that your customer wants. They're paying a premium after all and so communication methods shouldn't be a blocker from in any sense.
Transparency is equally vital. Ensure your corporate clients have access to all the necessary information about their rental, from contracts and payment details to maintenance schedules.
By offering streamlined communication and unwavering transparency, you set yourself apart as a dependable and professional corporate let investor. It's about building lasting relationships and securing your position in this lucrative market.
Where to go and what to do next
Are you in the position of wanting to get started and taking action in this space, either as an investor or a landlord?
Use PropSourcer to find a UK property sourcing agent that specialises in R2R deals and corporate lets. Or, use our sourcing agent matchmaker service where we'll pair you with the best suitable property sourcers according to your exact requirements.
A property sourcer can cover both angles for the rent to rent investor and the landlord. They'll operate as the intermediary to package a deal that works very nicely for both parties.
Not only that, but using their existing network and property investor marketing techniques, they may be able to get you in the door with one or more potential corporate let partners or clients to kick-start your cash flow upon any R2R property deals being signed.
