Liquid error: wrong number of arguments (2 for 1) Keeping good company: corporate tenants and lettings | Marsh & Parsons Sales and Lettings Estate Agents London

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Keeping good company: corporate tenants and lettings

Fri 26 Jul 2013

Searching for the holy grail of buy-to-let? explains the pros and cons of blue-chip tenants and corporate lettings. They are typically hard-working, high earners and hardly there a recipe for minimal wear and tear. They pay upfront, stay for years and as many are homeowners elsewhere, while away they treat properties respectfully.

Thats the ideal, anyway, and its why corporate tenants, company employees relocated to the UK for work, are seen by many landlords as the holy grail of buy-to-let.

"They tend to be from household name, blue-chip companies, local authorities and academic institutions who you know are totally reliable," says Fiona Fay, lettings manager at Aston Mead in Surrey and Berkshire.

In Surrey, Barton & Wyatt agency gets nearly half its lettings from US corporate tenants wanting to be near the two American schools. Americans often find London properties rather poky, so like mansions on the Wentworth Estate that rent out for several thousand pounds a month.

In Marylebone, Kay & Co find rental properties for the likes of Sony and Shell, and say 75 per cent of corporate tenants stay at least two years. So how do you get one? Not by calling company switchboards and asking if anyone fancies your one-bedder in Highgate, says Marc Von Grundherr, director of Benham & Reeves Lettings, two-thirds of whose clients are corporate tenants. "Companies or their hired relocation agents tend to look through reliable lettings companies," he says, which can mean lengthy viewing tours of many properties over several days.

Simon Wood of Marsh & Parsons estate agency advises working with an estate agent who has a specialist corporate and relocations department. "They will have links to all the relevant relocation agents and direct relationships with global mobility managers from large companies who want to handle the relocations themselves," he says.

Your property must be up to scratch to suit this demanding market. All-in serviced accommodation, paid for by the week, is a popular alternative to hotels. Otherwise, corporate tenants will expect a fully managed property.

George Spencer, chief executive of Rentify property services, says: "We have seen a rise in the number of DIY landlords who dont use a lettings agent but who are seeking corporate tenants. This is a trickier market and requires professional expertise."

If you find a copper-bottomed corporate tenant, they are unlikely to come without demands But the alternative, with the employee on a housing allowance and renting in their own name, isnt necessarily bad news for landlords. Mr Peskett says: "If its in the tenants name, you have a person to deal with who is accountable."

Be careful with the paperwork. Contracts can often be drawn up in favour of the company, such as a business break clause only for the tenant, and corporate leases can be "a bit old-fashioned", says Harriet Holden-White, of County Homesearch in Surrey.

"Agents prefer to use their own familiar leases," if they deal with corporate leases at all, she says. "They may turn down corporate tenants without even discussing it with the landlord because they can make more money by having a higher turnover of tenants."

If you find a copper-bottomed corporate tenant, they are unlikely to come without demands. "One Kensington

tenant requested TVs be installed in every bedroom, then complained when they werent Bang & Olufsen," adds

Mr Von Grundherr, who says that part of his job is managing corporate expectations.

Some agents question whether corporates are model tenants. Virginia Ewart-James, head of lettings at CBRE

Residential, says many work and socialise so hard they forget to set up standing orders or tidy up.

Andrew Dillon, director of Midas Lettings, says: "One company director trashed the place, leaving an 8,000

cleaning and furniture replacement bill. The company threw its legal department behind it. It was months before

the landlord was compensated."

And then there was the blue-chip tenant who adapted the property to suit his hobby. "When we came to do a

checkout with the landlords agent, he was bemused to find a lap dancing pole fixed to the sitting room ceiling,"

says Douglas Fensome, director of the County Homesearch Company. Who knows what the tenants inventory

clerk made of that.

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