CapRelo Blog

When to Offer Rental Services Programs at Origin and Destination

Posted by George Herriage on Wed, Jun 12, 2013

for_rent2.jpgAs more homeowners become renters, employers should understand and respond to this trend. Rental services are more important than ever due to this desire or condition. Rental services typically fall into two basic categories.

  • Short-term, temporary rental assistance.

  • Long-term, more permanent rental services.

 

When employers should offer these services depends on a variety of conditions. Some of the more common situations that make rental services valuable to transferees and the company include the following:

  • Difficulty in selling the current home.
    While down housing markets can impede selling a home, even hot real estate markets offer no guarantees of selling a home fast at an acceptable price. In some cases, the employee and family love their home to the extent they cannot conceive of finding another duplicate, resulting in the employee rejecting a lucrative relocation offer. Employers need to address this situation with home selling assistance and rental services at the new destination.

  • Inability to purchase a because of affordability or financing issues.
    The cost of living in the destination location may prohibit some transferees from affording replacement homes. Employer-offered rental services can help solve this problem. Further, the potential transferee, because of credit issues or interest rate spikes may not qualify for a sufficient mortgage in the new location. Once again, offering rental services, both monetarily and in the form of expert assistance.

  • Temporary or indefinite relocation job assignments.
    In the early 1980s, with mortgage rates as high as 18 percent, many transferees didn't bother to selling their homes, but simply rented residences in their new location. Those employees relocating to temporary or jobs of indefinite duration often adopt the same approach. Employers offering strong rental assistance will attract or retain more key employees under these conditions.

Employer relocation programs that offer rental services for renters and employees meeting these conditions get the benefit of satisfied transferees, while enjoying elements of cost control. Whether offering temporary housing for transferees not yet able to buy another home or renters who seek a more permanent residence, employers who include rental services will attract and retain higher quality, better performing employees.

Rental services need never become a relocation budget buster, as employers can arrange rental situations that are cost effective. In the case of temporary and indefinite assignments, rental services are indispensable benefits that will separate your company from the crowd of competition trying to get and keep the best employees available.

 

Download Our Free  Rental Services  Whitepaper

 

Topics: Rental Issues, Temporary Housing, Popular Rental Lease Assistance Features

6 Tips for Rental Lease Cancellation Assistance

Posted by Rick Bruce on Tue, Oct 16, 2012

Employee relocation often involves those who rent or lease their residence. Relocation policies should reflect this situation and offer assistance to those transferees in need. Monetary penalties for lease cancellation typically are manageable, particularly if the employer designs their policy carefully.

Longer-term leases, with extended time to run, can generate some larger monetary penalties, but cancellation fees can be negotiable. Employers can contain costs in this area by clearly describing assistance levels and capping maximum money outlays.

According to well-respected Worldwide ERC, the following rental and lease assistance features are common to competitive employee relocation programs. Since renters cost less--far less--than homeowners to relocate, competitive transferee programs are beneficial to both employer and employee.

Popular Rental Lease Assistance Features

Lease cancellation penalties--and assistance--should be capped. Lease contracts can carry a diverse range of penalties for early cancellation. Leaving your reimbursement or assistance language open-ended may challenge your cost containment and management goals. For this reason, many typical relocation programs cap assistance at up to two months' rent.

Assistance does not include reimbursement for damage deposits. As all renters are aware, landlords can have widely diverse "views" of cleaning necessities and/or damage repair costs. Employers providing assistance for this component are going above and beyond the norm. Once again, including this feature would be welcomed by employees, but could damage employer cost containment objectives.

Recognize common needs of renters at their current location and preferences (renting or buying) at the new location. Specifically including and noting your rental and lease cancellation assistance recognizes your concern for and value of your relocating employees who are not homeowners.

Popular Relocation Services for Renters

  • Complete needs analysis. While there are many requirements that apply to most renters, some employees will have specific needs. Addressing both the common and unique needs of individual transferees gives both employer and employee confidence in a smooth relocation process.
  • Lease cancellation advice, guidance and counseling. Much like selling a home in a down market, cancelling an active lease creates stress and uncertainty. Most employees have little or no experience in negotiating reasonable lease cancellation terms and penalties. Employers should offer useful advice and guidance regarding this important phase to help their transferees reduce stress and achieve a successful move.
  • Referral of experienced local assistance resources at the new location. Since the destination location is probably unfamiliar to the transferee, having a trusted local source of help finding a new appropriate residence, whether buying or renting, is valuable. Employers and employees both benefit from this feature, as the transferee gets settled in to a new home and becomes productive at the workplace quickly. Offering orientation of the new geographical area, showing preferred options during the residence hunting trip(s), and helping with lease or purchase negotiation, these sources achieve numerous goals, all of which save money, generate workplace performance and/or better bottom lines.


Outsourcing your needs to a professional, proven relocation firm, such as CapRelo, eliminates many employer administration requirements, employee trepidation and offers excellent cost management. Consider saving the extra workload and stress on your HR employees, while keeping your accounting and finance department smiling, by choosing this option.  

Download Our Free Article on Incorporating  Property Management

As Worldwide ERC so eloquently states, "Renters are people too!" Give them the respect, as valued employees, that they deserve. Include a reasonable rental lease cancellation and assistance feature in your relocation policy.

Topics: Lease Cancellation Issues, Popular Rental Lease Assistance Features, Rental Lease Cancellation Assistance

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