An employee being sent on an extended global or domestic assignment will need suitable long-term accommodation in their host city.
For postings of this nature, corporate bookers already know the benefits of corporate furnished apartments over hotel-style accommodation. But should you really be considering real estate rentals as opposed to long-stay serviced apartments?
We delve into the key differences between real estate-managed rentals vs corporate long-term apartments.
Our handy infographic below provides a neat summary. For those that have some more time, keep reading!
When looking for long-term accommodation, the first question you need to consider is how long the employee will likely stay.
Pre-Covid, it was challenging for bookers to secure short-term apartment rentals from real estate agents. This is because they required you to sign a lease of twelve months. At the time of writing this post, real estate agents are far more likely to agree to a three-six month lease. So if you need something for less than three months, a corporate apartment is the only answer. However, for stays over three months, the options expand.
Assuming this is the case, we’ve compared the process of securing the apartment.
Securing An Apartment
For a real estate rental, initially, the tenant needs to inspect the property, then the standard practice of completing a full written application (with references) applies. Once accepted, the corporate or the employee, taking up the tenancy, will need to sign the lease. As mentioned above, this is typically for 3+ months. Leases in Australia are generally for a fixed term. They contain mainly standard non-negotiable clauses and early termination penalties. This entire process takes a minimum of 3-5 days. In that time the assignee still needs somewhere to stay!
On the other hand, a corporate apartment does not require a completed application and references from the tenant. The booker simply needs to “book” the apartment on behalf of the employee and the company. The length of stay is flexible. The apartment is blocked out for the period requested, and changes to the departure date can be requested at any time. Furthermore, an apartment can be secured and ready to occupy within 24 hours.
“A Corporate Apartment can be secured quickly, with minimal paperwork and involvement from the person moving in. What’s more, there are no lock-in contracts for the length of stay.”
Knowing you can secure a short-term lease with a real estate, wouldn’t it be more cost-effective to pay a weekly rent as opposed to a nightly cost?
That’s because, when you move into a real estate property, there is additional effort and cost before you can properly settle in.
The first is bond, which, in Australia is 4 weeks rent. On the other hand, an Astra corporate apartment does not require deposits or bonds.
In a real estate rental, the guest is responsible for connecting to and paying the monthly cost of their utilities. This includes electricity, gas, and the internet. Corporate apartments include all utilities and unlimited WiFi in the rate.
And finally, most real estate rentals are not furnished, and if they are furnished they may not be equipped with kitchen items and/or linen. That means the person moving in will be responsible for the time and cost to source and install the furniture. On the other hand, Corporate long-term accommodation comes fully furnished and equipped. They have the facilities and equipment needed for extended stay guests. Think modern, home furnishings and thoughtful inclusions. All with the concept of easy living in mind.
The hidden costs (bond, utilities, furnishing, and time taken) of renting an apartment combined with inflexible lease arrangements makes Corporate long-stay apartments, such as Astra Apartments, a better and more cost-effective solution to your accommodation needs.
During the stay
The ongoing costs of a real estate rental vs corporate apartment are different. The first of these is related to payment terms.
With a real estate rental, the company or employee is required to pay rent 2 weeks or one month in advance. If the arrival date of an assignee is delayed, or a contract ends earlier, the company simply pays for the period regardless.
For a corporate apartment, an invoice is sent that covers only the dates of occupancy. For projects, where start and end times can often shift, the flexibility of not paying rent in advance or paying rent when the employee has already departed can be a significant cost saving.
Not only is it the “rental costs” that are different, but also the additional responsibilities and costs associated with living in real estate rentals.
Once in an Astra corporate apartment, weekly cleaning and fresh linen are included in the rate. The employees have 24/7 access to support, and repairs and maintenance are all managed by Astra Apartments. Employees can simply focus on the task at hand.
For real estate rentals, the property manager will be available during business hours for issues around repairs, however, the process can be delayed while they get approval from the landlords for any repairs; everything else sits with the tenant to take responsibility.
Astra Apartments are not only more flexible around payment terms, but they offer 24/7 personalised support.
As mentioned earlier, project timelines are prone to shifting. Or perhaps a pandemic hits, and you need your assignees to return home quickly.
Because real estate rentals require a signed lease for a fixed period of time, should the company need to terminate early, fees will apply. Plus, remember the 4-week bond paid prior to moving in? If anything is wrong with the apartment, or it is not cleaned properly on vacating, this fee (or a portion of it) will not be refunded. Also, any furniture purchased will need to be disposed of at the time and cost of the tenant.
Even if you don’t need to terminate the agreement early – there are still formal set notice periods that need to be applied.
At Astra Apartments (Corporate long stay apartments), the booker is invoiced for only the night’s stayed. Plus the tenant has the luxury of just 72 hours notice to vacate.
A company may be faced with additional and unexpected costs at the end of a real estate rental, which makes budgeting and cost management difficult. A corporate rental provides a hassle-free process for both the booker and tenant making it the better long term accommodation choice.