One of the most common questions we are asked by property owners is whether should they rent their place furnished. This typically comes from the owner of a condominium or house who wants to convert their former residence or second home into a rental property. However, sometimes it is someone just trying to come up with a way to get a few extra dollars of rent out of a currently unfurnished home.
Either way, it is a good question. As usual, the answer is: it depends. Here, we will lay out the pros and cons of renting a furnished home, what is included in a furnished rental, tips on appropriate furnishings, and what types of scenarios will most likely be successful.
The Pros and Cons of a Furnished Rental
Before you decide on renting your home furnishings you need to consider the pros and cons.
The Pros of a Furnished Rental
Consider the following benefits of renting out a furnished property:
- More Rent – It is sometimes possible to achieve higher rent for a furnished home than a vacant one.
- Shows Better – A furnished home can show better than a vacant property. It is almost like a staged home.
- No Moving or Storing Furniture – If you are leasing a home with pre-existing furniture you don’t have to worry about moving, storing or disposing of it.
- Easier if you Come Back – If you rent your home furnished and you want to come back, you can do so without having to move everything all over again.
The Cons of a Furnished Rental
Now consider the following downside of renting out a furnished property:
- Harder to Rent – Most people looking to rent a home have their own furniture. With fewer people looking, furnished homes usually take longer to rent.
- Shorter Occupancy – Most people leasing furnished homes don’t stay as long. It is easier for them to leave since they have less to move. Long-term tenants will bring their own belongings for a long-term stay.
- Matter of Taste – Prospective tenants might like the home but not the furniture.
- Furnishings are Personal – many people don’t want beds and couches other people have used.
- Risk Of Damage – When you lease out a furnished home you run the risk that furniture will be damaged or turn up missing. The security deposit is often not enough to cover everything.
- Wear and Tear – Even when there is no chargeable damage, you need to understand that your furniture will suffer normal wear and tear. It will eventually need to be replaced.
- More Work – Managing a furnished home takes more work. You need to think of it as renting two things: You are renting a home and you are renting the furnishings. The furnishings require extra documentation and extra responsibility.
What Does a Furnished Rental Property Include?
Many furnished rentals come with just basic furniture while some owners choose to provide items such as towels, bedding, dishes, pots and pans, and silverware.
Other items often included are decorative touches such as paintings, mirrors, and other things that make it more inviting. You can also include a washer and dryer combo. At the end of the day, it’s up to you to decide what to include in your furnished rental.
Tips on Appropriate Furnishings for Your Rental Home
If you are going to lease your home furnished it is important that you have appropriate furnishings. Here are some general tips to help your chances for success.
Avoid using older more “lived-in” furnishings. This turns prospective tenants off, significantly increasing your vacancy time and reducing rent the you receive. Don’t provide very valuable furnishings that are too “high-end” or have sentimental value. This can also be a disaster. Remember people will be living there and things can go wrong.
Look for that “goldilocks” level and be very mindful of the space. Remember less is more. Your home should almost seem like a nice hotel. Think of an Airbnb or vacation rental setup.
Pro Tip – When advertising your rental property make sure to highlight how it is furnished.
Furnished Rentals Require Extra Measures
You will need to document the entire inventory and the condition of all items included. An itemized list by room along with photos is a great way to do this. You also need to be clear if you plan to charge for each missing knife and fork. Yes, it can become a tedious task but preparing ahead of time will save you headaches in the long run.
You need to be aware that items included in the lease are expected to last through the term of the rental. Therefore, items may need to be repaired or replaced if they wear out or break. For example, if you rent a home with a television that quits working, at no fault of the tenant, then it will be up to you to have it fixed or replaced.
Likely situations making it a good or bad idea to rent furnished. Although there is not one right or wrong answer for everyone, there are some overall guidelines that indicate if it is a good idea for you to rent your home furnished or not.
Going from an Airbnb-type short-term, (less than 30 days), to midterm, (over 30 days), or even long-term, (yearly), might make sense. These properties are often set up correctly. The owner is accustomed to management-intensive land-lording and the investment has already been made.
Converting a second home or vacation property to a furnished rental can be a good fit for a furnished rental if you have the right furnishings. Furnishing a vacant property solely to get extra rental income is usually not worth the trouble and expense. If the motivation is to help cover the monthly expenses, spending more to furnish in order to get more rent is probably throwing good money after bad.
Leasing a home furnished as a way to avoid moving and storing furniture is also usually a bad idea. The furniture usually makes your home harder to rent. The sooner you accept this fact and empty out the home the sooner you can get it rented to a quality long-term tenant.
Leaving a few pieces of furniture can be OK. You just need to understand you will most likely need to get rid of what you left behind and if your new tenant wants to move in soon, you may have to rush.
Seek Professional Advice
Renting out a furnished property can be very tricky and there is even more involved than a vacant rental. You may want to consider talking to a professional property manager who can advise you.
A property manager can help you with pricing, what furnishings to include, the extra documentation involved, and even if it is something best for your specific situation.
Renting out a furnished property has many pros and cons. You might be able to get more rent, it may show better, you don’t have to move or store your furniture and it is easier to move back. Unfortunately, it is generally harder to rent, there is usually shorter occupancy time, more risk of damage, more wear and tear, and more work involved.
Some owners include more furnishing than others but you will want to avoid using “worn”, very valuable, or particularly sentimental furnishings that cannot be replaced. Furnished rentals should remind you of a nice hotel room. A furnished rental will require extra documentation and may require the replacement of items during the lease.
You may do well converting a short-term rental into a longer-term furnished rental. Vacation and second homes often make good candidates too. However, furnishing a vacant home hoping for the extra cash flow, or leasing furnished just to avoid the hassle and expense of moving is usually not the best choice. Of course, you can benefit from consulting with a professional property manager to help guide you.
Now that you understand the benefits and drawbacks of renting out a furnished property, you can decide if this is the right choice for you.
If you need help managing your Long Beach, Los Angeles or Orange County rental properties, contact the Mike Dunfee Group for a free no-obligation consultation. We are here to help.
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