Corporate tenants fill a void for some area homeowners

The housing market has been less than ideal for sellers over the past few years. That is why many distressed, but creative, homeowners are joining the ranks of those who rent their homes in order to cover costs.

Becoming a landlord and finding good tenants can be difficult, however.

That is why a growing number of homeowners in the Chicago area and around the country are choosing to rent their homes as corporate housing.

Joseph Menconi had dabbled in investment properties for years, owning a six-unit building in Orland Park and renting it to conventional tenants. He also owned a condo in Schaumburg.

In 2003 he and his wife purchased property in Medinah, tore down an old ranch home and built their dream house. Their fortunes changed radically a few years later, however, when Menconi, a former banker, lost his job.

By March, 2008, the Menconis knew that the only way they could keep their dream house was to move out of it, back into the Schaumburg condominium and rent out their Medinah home to help cover the mortgage and taxes. But he wanted tenants who would appreciate the lovely home and take good care of it.

While surfing the Web one day, Menconi stumbled upon CorporateHousingbyOwner.com, a listing service for people who want to market their house, townhouse or apartment to transferees and executives on long-term assignment who would rather not live out of a hotel.

It took many months, but in late 2008 Menconi got his first tenant, a transferee from Utah who wanted to rent a family home while they learned the Chicago area and chose a permanent home. The family stayed for six months.

Shortly after they left, another similar tenant moved in, renting for a full year.

"There is no question when you rent to corporate employees, you get a high-quality tenant. I have had zero problems because I have gotten people in high-level, high-paying jobs who have discriminating taste and are coming from a home similar to mine," Menconi said.

He also admits he has been able to get a higher rent because he has worked with corporate relocation departments.

"Listing with CorporateHousingbyOwner.com has served its purpose for us," Menconi said. "We would have been in a lot more trouble a year and a half ago if we hadn't been able to lease out our house."

For the $339 per year basic listing fee, Menconi said, he gets to upload six photos of his home, as well as a complete listing of what the home offers. He can go in to the Web site and edit the listing any time. CorporateHousingbyOwner.com has also provided him with good leads that have panned out.

Based in San Francisco, CorporateHousingbyOwner.com is owned by corporate housing veterans Eric and Kimberly Smith, who also own their own full-service corporate housing company, Avenue West.

"There is a huge demand for corporate housing all over the country, but Chicago is one of the top five markets in the country for corporate housing," Eric said. "Every company handles long-term housing for employees differently. Some companies rent the properties for their employees through relocation departments and others give their employees an allowance and let them make their own arrangements."

The Smiths developed CorporateHousingbyOwner.com to help individual property owners develop their properties to a standard that is acceptable to the industry and to help them connect with prospective clients.

In addition to listing the properties on the Web site, they have developed an owner's manual, explaining to private owners what they need to offer (furnishings, high-speed Internet, cable television, fully equipped kitchens, etc.) in order to attract and keep corporate tenants.

They also give guidelines on setting prices, minimum length of stay parameters and so forth.

"Some people are willing to rent their homes or apartments to vacationers for a week or less. Others require a minimum three-month stay in a single-family home or a minimum one-month stay in an apartment," he said.

The most growth the Smiths are seeing is in suburban areas.

There are lots of options for extended stays in downtown areas, but not as many in the suburbs, Eric said. And since many companies are located in the suburbs, it is not surprising that lots of executives want to rent a place close to where they will work.

Not everyone who rents through the Web site is a visiting executive, however. Some are people who sold their home quickly and are waiting for their new home to be built. Others are seasonal visitors who like to visit Chicago in the summer to escape the heat of Arizona or Florida.

"We don't get involved in the rental transaction at all," Eric said. "We work with the owners to figure out their goals and set up their home to be a great source of income. We also provide them with all of the necessary forms and documents and give them step-by-step procedures to follow concerning checking the rules of your condo or homeowners association to see if such rentals are permitted, setting up a tour of the property, running background checks on potential renters and marketing directly to corporations."

Many of CorporateHousingbyOwner.com's 2,000 to 3,000 owner-clients list their properties on multiple Web sites, marketing themselves to vacationers as well as corporate executives, he said.

Rebecca O'Reilly lives in Phoenix with her husband and children, but they also own a ranch home in Schaumburg.

"My husband's family is from Elk Grove Village and we like to go up to visit them for six weeks in the summer to escape the heat of Phoenix, and a couple of other times a year," O'Reilly said. "And my husband's job also had him traveling back and forth of Chicago quite a bit."

So they purchased the ranch home for their occasional use. But they didn't like leaving it empty much of the year and didn't want to rent it out year-round because then they wouldn't have it available when they wanted to visit.

So the O'Reillys chose to list it with CorporateHousingbyOwner.com for short corporate stays of two-to-six months.

"The rent we get helps to cover the mortgage so we can keep the house for when we want to use it," she said. "Right now we have someone in there from February through the end of June who is visiting from the East Coast in order to work on a project."

"When someone rents through a corporation, they are generally very responsible and professional," O'Reilly said. "They know they are representing their company."

She also likes the fact that she has direct contact with her renters, instead of having to work through a management company.

"In the heart of winter it can get tricky to get a renter, but overall Chicago is pretty bustling with corporate travelers, so this has been good for us," O'Reilly said.

Management companies for corporate housing have also discovered the usefulness of CorporateHousingbyOwner.com. They, too, list their available units on the site.

Liz Keeley, owner of At Home Inn Chicago, a corporate housing management and booking company, lists several of her 50 units on this Web site and others.

"We own four properties in Lincoln Park and Old Town and have a booking service for 46 others," she said. "Through the site we have rented to businesspeople who are no longer interested in living out of a hotel, families visiting friends and family members, couples on a getaway and even people whose houses have been damaged by fire or water and are awaiting repairs," Keeley said.

"Our average stay is four to seven days and we also do lots of monthly rentals," she added.

An Internet search is now the predominant way in which corporate executives and relocation departments find housing around the country, according to Keeley, and CorporateHousingbyOwner.com helps level the playing field between large corporate housing companies and individual owners.

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