Having run a successful real estate business for over twenty years, you hopefully learn a thing or two. Last week, I had a client who wanted to lease his home out as a corporate let for conference season in 2012.

This isn’t unusual, downtown Denver has a lively business scene, and properties come up all the time. However, this guy was different. The task ahead of me was so difficult that it prompted me to write this article in the hope that nobody else makes this mistake, or comes to me with the same attitude.

Let’s call him Alan for the sake of blushes. Alan, owned an apartment in downtown Denver. The block was a nice one, in one of the tallest buildings in the city. The view was excellent, the property ideal. It was around 1,500 square feet, had wooden floors, fully-fitted kitchen, high quality appliances and was in great condition throughout.

Now at this point, you would think I would be trying to bite his hand off. A great property, in a great position and ready for a corporate rental. You would be right, except Alan didn’t have the faintest idea what he was doing. The conversation went something like this.

“So what do you think?” Alan asked.

“I think it’s great, and we could have this rented out for most of the year. I would estimate the average rental to be somewhere around the $2,000 per week mark, how does that sound?”

“Is that all? I saw on the internet properties were renting for $25,000 per week. That’s more the figure I was looking for.” Alan replied.

“Erm, you wouldn’t get anywhere near that amount unless they were holding the Superbowl here or something. Where on earth did you see that?”

“No deal then, I may as well stay here. I wanted $25,000 per week, even $20,000 at a push. Craigslist has them on there for $30k, I’m not renting it out for 10 percent of its value.” Alan replied, shocked.

“The reason they are being advertised is because they’re empty. Because nobody in their right mind will pay that kind of money for a week. Alan, I would be happy to rent this out for you. I have a corporate client right now who could have someone in here within a fortnight, but two thousand is about as much as you’re going to get.”

“F**k that then, you can go now, I’ll do it myself if you can’t handle it.”

The tone had completely changed and Alan got quite angry. He genuinely thought a corporate rental could net him 30 grand a week as wasn’t going to take no for an answer. I left right then and didn’t look back.

I checked the internet listing the next week, and sure enough his was there. He had compromised a bit by asking $20,000 per week. Corporate rents just don’t go that high for normal situations. The ad was there the next week, and the one after, and for a couple of months later, then stopped.

I was passing his building one morning and decided to stop by the site office to see what’s what. It’s often a good way of getting the jump on a newly vacated property. Guess what? A brand new foreclosure in the building, Alan’s apartment.

Corporate rentals are a great way to make money, but be realistic in your expectations. The market will only pay market rate. Go higher and go out of business.