For many landlords, deciding on whether or not to furnish their rental unit is a tough call. It requires considerable money, time, and effort.
It used to be that offering free utilities would edge out other competitors. But at present, more and more niche markets have opened up to focus on renters’ special needs.
If you want to retain a competitive advantage, you need to adapt to and serve the needs of the demographics you’re targeting.
One of these specialized services includes providing fully furnished rental homes. Some tenants want a hassle-free move and would prefer their units to be ready-to-move-in spaces. They save on spending on a moving van and don’t have to worry about decorating their living area.
Furnished units are especially popular among students and working professionals who are assigned temporarily to one place for training. As a landlord, is it worth the trouble of budgeting for a furnished rental?
What Furnished Homes Mean to a Landlord
The final decision of what to include in a furnished rental property rests on the landlord. In general, furnished homes appear with the following in each room:
- Kitchen: Refrigerator, oven, stove, toaster, coffee maker, dishware, and cooking utensil
- Bedroom: Bed, dresser, and nightstand
- Living room: Coffee table, sofa, and TV set
- Bathroom: Shower curtain and floor mat
- Dining: Table and chairs
Typical Renters for Furnished Homes
Furnished homes can appeal to different markets such as students, business people, and tourists who are looking for a place to stay in a given time frame. A rental is often cheaper in contrast to hotel rooms, especially if you’re staying for a few weeks or months, commonly less than a year.
These types of renters are aware that they’ll eventually move back to their place of residence or a permanent dwelling. It’s more reasonable to live in a furnished unit than to spend time purchasing new items when the occupancy is short.
Convenience and reducing stress are why these groups opt to sign a lease in a furnished rental.
Pros of Furnished Rentals for Landlords
1. A Furnished Home Means a Rent Increase
Given that a renter doesn’t have to move or buy anything, the convenience is unparalleled. That’s why a furnished unit is priced higher. Before setting the rent fee, check out your neighborhood rentals to know how much they’re charging.
Although the rental fee per month can be used to purchase the items you’re providing, you should be careful not to set it too high. Otherwise, your competitors can snatch your potential renters away.
You can play with the rent price until you find the optimal rate for you. Make sure to consider the length of stay of an occupant. For example, you can set a higher charge if they plan to stay for a week and reduce the fee when they rent for a month.
2. Little Damage Resulting From Moving Heavy Furniture
The best reason to furnish an apartment is the decreased risk of minimal damage to your property as a result of moving in heavy furniture. You won’t have to worry about fixing scratches, scuff marks, and dents that appear in unfurnished units.
3. Focus on a Particular Demographic
Since you already have an idea of which market segments to target for your furnished rental, it’s easier to launch a marketing plan. You can analyze the features and amenities prospective tenants are attracted to and budget for these renovation projects.
4. Request a Higher Security Deposit
Your furnishings need protection since they’re at risk of being damaged by frequent occupants. Landlords can therefore request a higher security deposit than in an unfurnished unit, where there’s only bare space.
This is fair for renters since the deposit will cover any repairs that don’t fall under normal wear and tear. A good piece of advice is to include this condition in your lease so there are fewer conflicts down the road.
5. Staged Homes Are More Appealing
Marketing a furnished rental is far easier since you can fill the visual space instead of letting a renter imagine how the bare unit would look like when they move in. It’ll also be a breeze to take attractive photos, creating more interest in your property.
Drawbacks of Furnished Homes for Landlords
1. Furnished Units Are an Investment
Given that your furnishings are exposed to more damage, the risk is higher. You need to have a detailed property maintenance plan to ensure that your unit remains in its best shape.
Another way to counter the risk is by collecting a high security deposit. Renters would then be motivated to take better care of the rental property.
2. Furnished Homes Mean Short-Term Tenancies
The tenants you’re targeting will be prioritizing furnished rentals since they’re staying for a limited time period only. As a landlord, you need to market your furnished units often to prevent losing income during vacancies.
3. Renters May Opt Not to Keep Certain Furniture
Your tenants may only need particular furnishings. You might have to find storage space in this situation. You would then need to consider storage costs if this is the case.
Is Furnishing Your Rental Sensible?
Before going all in and investing in a furnished rental home, it’s best to evaluate your environment first. Consider the following:
Is your location well-suited to serve renters seeking furnished units? Is it in close proximity to schools, business districts, and local attractions? You need to know if you have prospective renters in the area and market your unit accordingly.
Is your market willing to pay the higher rent rate? You can easily customize your furnishings, depending on your target renters. Students are less picky when it comes to the quality of furnishings compared to business professionals.
Though a furnished home requires more maintenance and frequent marketing, it can lead to earning more profits. Each landlord must choose which option attracts the most eligible renters for their unit.
Unsure about the best rental strategy for you? If so, Pro X Property Management is right for you! Our team of experienced property managers is committed to offering the best possible customer service to both landlords and tenants. Contact us today to get started!