Furnished rentals hold significant sway over the housing market, but they’re not for everyone. Landlords deliberating whether or not to include furniture with their rentals may find themselves wondering, will furniture get stolen? Will tenants damage furniture deliberately? What do start-up costs look like?
The good news is that, over time, furnished rentals tend to pay for themselves. Even so, it’s good to consider the pros and cons of the practice so that you know what kind of field you’re entering into.
Pros and Cons of Offering Furnished Rentals
Buying furniture for your personal residence can be exhausting. Trying to furnish several dozen lots can feel like a stylistic challenge as well as a budgetary one.
That said, you can weigh the pros and cons of furnishing a rental unit while keeping your initial budget in mind. These deciding factors can include:
Pro: You Can Increase Your Monthly Income
When you furnish an apartment or rental unit, you have the opportunity to increase how much you charge for rent every month. While you’ll want to base the specific number on the housing market in your area, you can usually take in at least 30 percent more rent than you would have had you left your lots bare.
Make sure your initial income can compensate for the cost of purchasing and restoring your furniture mentioned above, and the ROI of your lot will turn in your favor.
Pro: You Can Better Market Your Properties
Showing furnished rentals tends to give tenants a better idea of how they may use the space you have available to them. If you share photos of your furnished apartment on your website and offer different strategies for organizing your goods, you can better let tenants know what kind of property you have on hand. Parties on the fence about your apartment can see it put to use and more enthusiastically invest in your offerings.
Pro: You Appeal to a Broader Audience of Tenants
There’s more than one kind of tenant who prefers to live in a furnished apartment. College students are among the best-known demographic to like apartments with accessories. But you can also market your lots to people in business or any parties looking for stays between three and six months. With that in mind, keep your furniture neat but unthemed. While you can embrace a color scheme, try to avoid creating a space that’s appealing to a single demographic. The more versatile your space is, the more potential tenants you’ll attract to tours.
Con: Your Start-up Costs Will Be Higher Than Average
Purchasing furniture, especially quality furniture, for several dozen apartments isn’t cheap. You’ll need to watch your budget when you first invest in your property of choice so you can better estimate how many furnishings the lot will cost you. While rent can help you make these costs back, they can be a significant hurdle for anyone first getting into the world of investments.
Con: Tenants May Damage Your Belongings
While you can outline certain behavioral expectations of your residents in your leases, there’s always a chance that tenants or their pets may damage your furnishings. Before you lease a damaged lot to a new tenant, you’ll need to replace or repair the damage in question. There’s a chance for you to use a resident’s security deposit to do just that, but you may still end up losing money on an apartment’s general repairs.
Protecting Your Furnishing
If you’ve thought about offering furnished rentals in the past, there may be some common obstacles that changed your mind. Tenant theft and damage, for example, are often the two biggest roadblocks standing between you and increased lot value.
Luckily, there are some easy ways to protect your furnishings without conducting weekly inspections of each tenant’s apartments. You can:
- Create an inventory of the items
- Let tenants access your apartment inventory for reference
- Remove any high-value items from the lot
- Invest in durable but affordable home goods
- Inform tenants of replacement fees upon their lease signing
If you’re concerned about creating an effective lease for a furnished apartment, contact a housing lawyer in your area. The two of you can work together to ensure that your policies regarding rental furniture and all other elements of your business are ironclad.
How to Furnish an Apartment
If you decide to furnish some of the apartments on your lot, some tips and tricks can simplify the process. To get started, you’ll want to make a list of the essentials that each room requires. Don’t go overboard with your furniture, but make sure that your living spaces are comfortable, bedrooms are clean, and kitchens are equipped for standard and guest use.
Add Value to Your Rental Units Today
A furnished rental can help you draw in residents who otherwise may have been on the fence about your property. If you can work with furniture realtors in your area, this process can be relatively inexpensive, as your lot’s increased rent can often pay off these start-up costs.