How rental assistance companies are taking the stress and high expenses out of the rental process.
Your transferee has just landed a fantastic new promotion. You’re happy; they’re happy and eager to get the relocation process started. After the adrenaline of the news settles, the stress starts to creep in for the transferee: they have to relocate. Suddenly, the process can seem intimidating. How do they start their rental search process, when they have no idea what they should be looking for? As for the relocation company, how do you keep your costs as low as you can while providing the best service?
With renting in America at an all-time high, mobility professionals have few resources to help relocating employees who need or want to rent. Relocation Management Companies (RMC’s) and Human Resource professionals find it challenging to figure out how to fund rental finding services within the relocation policy. The result? HR professionals are spending more time and money on temporary housing that doesn’t need to be spent, and employees are stressed out looking for a rental property.
In a 2013 case study, companies who participated recognized that there was potential for significant savings. With a successful service model and dedication from the rental assistance company, $1.7 million was saved by using the available services. This cost savings was measured by taking the number of temporary housing days authorized through policy less the days actually used to tell us how many days were saved. By multiplying days saved times the average cost of temporary living resulted in the dollars saved.
- 43% of the renters using a tour service through this rental assistance company reduced the number of days needed for temporary housing. This resulted in a 78% cost savings for the employer .
- 48% of the renters were moved into temporary housing immediately when the rental assistance company was assigned which resulted in a 30% cost reduction for the employer.
- The savings nets to $1,368* per transferred employee after subtracting the rental assistant company’s fee of $850 per renter.
- Services provided by this rental assistance company result in an overall 47% cost savings to the companies by reducing the number of temporary housing days needed.
*Based on Industry standards from CHPA for temporary housing at an average rate of $131/day in 2013 and $78 in 2003
While these numbers are beyond impressive, they aren’t the only benefits to using a rental assistance company. The amount of stress to the employees and their families significantly decreased and the time required from the transferee in the rental search was lowered.
The average vacancy rate in 2012 and 2013 was only four percent, creating more demand than supply in many areas in the country. As this trend continues to grow, transferring the employees will struggle to find housing in a timely manner. They will face more competition securing a rental due to multiple applicants. Although new apartment inventory will become available as developers complete new projects, less than 40% of relocating professionals want apartments. Most prefer the residential lifestyle of single-family home rentals, town homes and privately listed condos.
Finding the right rental home in the right community that closely replicates a preferred lifestyle is difficult for those needing to relocate quickly. Moreover, when children are involved, the schools are a top priority. Having the right support through the acclimation and rental-finding process is critical to a successful move for the entire family, not just the employee.
By Alexandria Rhodes
PorchLight Rental Services