Looking to keep good company
Fri 26 Jul 2013
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 homeowners elsewhere, renting out their own property while away - they treat properties respectfully.
That's the ideal, anyway, and it's why corporate tenants, company employees relocated to the UK for work, are seen by many landlords as the 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 of its lettings from US corporate tenants wanting to be near the 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 Grunderherr, director of Benham & Reeves Lettings, two-thirds of whose clients are corporate tenants. "Companies or their relocation agents tend to look through reliable lettings companies," he says, which can mean lengthy viewing tours of many properties over several days.
Work with an estate agent who hasa specialist corporate and relocations department, says Simon Wood, of Marsh & Parsons estate agency. "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."
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 don'tuse a lettings agent but who are seeking corporate tenants. This is a trickier market and requires professional expertise."
The old-style corporate tenancy, with the rental in the company's name, rent guaranteed and the employer responsible for damage and problems, is on the wane. "They're a dying breed these days, as every company tries to take these rental liabilities off their books and pass it on to the employee," says Chris Peskett, of Apparent Properties.
But the alternative, with the employee on a housing allowance and renting in their own name, isn't necessarily bad news for landlords. Peskett says: "If it's 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 tenents 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 tenent requested TVs be installed in every bedroom, then complained when they weren't Bang & Olufsen," add 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 to lettings at CBRE Residential, says many work and socialise so hard they forget to set up standing orders or tidy up.
Andrew Dillon, Director or 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 landlord's agent, he was bemused to find a lap dancing pole to the sitting room cieling," says Douglas Fensome, director of the County Homesearch Company. Who knows what the tenant's inventory clerk made of that.