Renting directly to employer/company.....Any tips?

[Dan Golby]

We finally close the deal for our first rental property this coming Friday, I am very excited. It is a house with a basement suite. The rental market seems fairly good in my opinion, we already have the basement suite rented out and it isn't even completed (thanks to a referral from a fellow investor)









We posted an ad to rent the top floor out for April 1st and had lots of demand (took the ad down after 4 days because we were overwhelmed with choices). One lady in particular seemed like she would be a good fit for our "perfect tenant" Long story short she is tranferring here with her job which is with a government agency so the employment should be secure. In the process of reference checking etc. we have now been approached by her employer, they want to rent it directly from us as opposed to us renting it directly to the tenant. They also want to use us in future deals, for example they said there will be someone else transferring to the area in the next few months. Rather than look around they offered to approach us first and give us an opportunity to acquire another property that suits their needs. To me this seems great, I intend on getting another property this year so why not have tenants before you even buy it?, and in the case of the upper suite, if the lady gets transferred with her job again there is a chance that the agency will keep the suite rented and offer it to the next employee.









Personally I think it could get any better, so I guess my questions would be:









Is there anything to watch out for when renting to companies as opposed to individuals?









Should this scenario be setting off any warning bells, or is it as great as I think it is?









Thanks in advance for feedback!!




Dan

 

[brentdavies]

We have rented to corporations many times over the years.



Sometimes good and sometimes horrible. Are you getting the management team or the construction team? Will they take off their muddy boots at the door?



One of the worst clients was to a Fortune 500 fast food company who were bringing in management staff. At first it was great, then the cracks started to appear. Rent at the beginning was on time, but later on became late constantly, and then real problems with the "management staff" in the properties, with overcrowding, messy suites, noise complaints, etc. Just because they were a fortune 500 company did not mean they could abuse us.



Some of the best corporate rentals was with several engineering firms, who are placing new arriving professionials. Great tenants with a solid company behind them.



At the end of the day, we needed to know who was the person living in the property. Did they meet our standards? Today, we shy away from corporate rentals in blue collar Edmonton. Calgary is a different city.



Suited properties were not suitable properties for most of the corporate clients we were dealing with. Basement suites were off the list. Except for the road crew.

 

[Dan Golby]

Thanks for the reply.

The tenant is a professional woman and her 4 year old son so I am hoping it is going to be ok. There won't be anyone else in the house for now. We are working with our lawyer to make sure we do the agreement up properly. We want to get her name on the agreement even though the payment will come from elsewhere. Not interested in turning the place into a motel room that's for sure.



It has been a good learning so far. We live in an oilpatch town and there are companies who will rent a furnished house for $5000/month but you have to provide some cleaning services etc. It is something we have been considering but don't want to end up with the "construction crew" and have a mess on our hands a few months into it. We will get our feet wet with this first.