Executive rentals can seem like a lot of work, even if the returns are greater. There's also the question of shorter tenancies and more demanding renters looking to be waited on hand and foot, but the time and money investment may well be worth, reports Jemima Codrington.
Video transcript below:
Jemima Codrington: Executive rentals in major urban markets are always in demand. Could it be time to add one to your portfolio? We find out in this week’s Investor Insight on Crew TV.
Executive suites can make a great addition to a residential portfolio. So what exactly can investors expect from a high end rented property.
Paul Kandakos, President, Realty Hub
Paul Kandakos: Well high end executive rental units can have its perks and perils, so that’s something investors have to be aware of. On the perk side what you will find is that executive rentals deliver great cash flow. That’s why a lot of people try to get into a sub set of renting. Now on the downside, what you are going to find is that you have to be a lot more active in terms of management, because it’s typically catering to executives that are coming in from out of town and trying to fill the gap between a short [way power] stay and a long term residential tenancy.
So you are looking to typically between that 6 to 12 month gap, maybe even shorter depending on the executive that’s coming in out of town. What you want to do is, you want to also make sure that the property is properly furnished. You want to get an interior decorator in there to make sure that it’s living up to the standards something executive.
Because they are paying a premium to market of just an unfurnished rental unit, you actually have to do a nice job and know your demographic and cater that demographic by making sure that the unit is properly furnished. So on the upside what you have is you’ve got great cash flow, on the potential downside maybe not downside is that you have to actively manage this property, you have to make sure that you’ve got décor done properly to match with the demographic that you are catering to.