Should I be hesitant to give Corporate Housing long-term leases?

Question

Hi. I recently acquired a townhome in Asheville, NC that I'm operating as a furnished mid-term rental. I have been contacted by multiple corporate housing companies that would like to secure long-term leases and then operate it themselves. Having a long-term lease at mid-term rates and not having to worry about keeping it booked, cleaned, or maintained sounds good. However, I'm a bit hesitant to allow this, as I won't have control over who is occupying the property or how well it is being maintained.

Does anyone have experience with these arrangements? Am I right to be hesitant?

I would appreciate anyone's perspective on this.

Thanks,

~ Troy

Does anyone have experience with these arrangements?  Am I right to be hesitant?

I would appreciate anyone's perspective on this.

Thanks,

~ Troy

Glen Wiley · Answer

I used corporate housing for one of mine and it was a disaster. The tenant they put in wrecked the house, they ended up taking his rent and not paying me. I took them to court for over $20,000 in damages and unpaid rent.

I feel that one of the ways I am able to optimize my SFH rentals is by being really good at selecting tenants, I will not ever do this again.

Troy Sabin · Answer

Thank you all for your feedback. One of them was certainly sketchy, as I looked into them.

Colleen F. · Answer

@Troy Sabin  What kind of companies?  Is this a health care company that will provide housing to their workers or a company in the business of re=renting space that they rent from you.  The former I would be ok with but the later no. The reason being you have no control over the renters. Now if you have a health care company paying the credit part is no longer an issue and they do background checks on all employees. And by long term do you mean longer than a year or only a year?

Allen Duan · Answer

Are these companies asking to do rental arbitrage with your property? Usually RA operators are paying long term rental rates to the owner and then subletting as a STR or MTR. If they are offering you MTR rates, that's pretty amazing and I don't know how they would make a profit. Either way, make sure to heavily vet these operators. Ask to speak with their other landlords. You want to see that they have a great track record.