Myth #2: A Company Easily Can Do Corporate Housing for Less
As the corporate housing industry evolved in the 1980s, a number of large corporations believed it would be cost effective to purchase and furnish condominiums for their employees’ exclusive use. These companies believed that do-it-yourself corporate housing could save thousands of dollars. But the truth is that going it alone actually was much more costly and extremely frustrating. In fact, many companies signed up for way more than they bargained for.
Elaine Quiroz, president of Corporate Housing Strategies, Roanoke, Virginia, agrees and says that most companies that try to set up their own corporate housing apartments eventually return to working with a corporate housing provider for two reasons, the first of which is that they often do not consider how involved and costly it can be to set up a new corporate apartment. “They often underestimate the time and money involved in scheduling, paying connection and delivery fees, and the costs for furniture, housewares, telephone, electricity, water, and Internet,” says Quiroz.
Second, Quiroz says that these companies also do not take into account the “set-up time involved,” such as waiting four hours for the cable company to simply show up or fixing a leaky dishwasher at 2:00 a.m. Plus, it takes many hours to coordinate set up and take down of a property, not to mention cleaning, inspecting, and coordinating transition details with the guest. These additional activities can add up to hundreds of wasted hours, and time is money. In addition to the time and effort involved in do-it-yourself corporate housing, there also are a lot of hidden costs involved with owning and/or managing a property. Companies must provide an upfront down payment (when purchasing a property) or pay a security deposit (when renting an apartment). They also may have to sign a long lease and pay rent each month regardless of whether there is a guest in the apartment. On top of that, the company must furnish, service, maintain, and insure the property—all very costly and timely endeavors for an organization whose core job function is not property management.
Quiroz says it never occurred to these companies that corporate housing was not a one transaction deal. “It’s not like buying a television, where you shop around, make a purchase, walk out of the store, and it’s done. When a corporate housing provider arranges your housing, they are the point-of-contact for the guest from start to finish providing move-in instructions and a host of other questions the guest will inevitably have.”