Before beginning to rent out your rental property, consider the pros and cons of renting the property furnished. In this article the team from Scudo Real Estate is going to delve into this question and provide the answers you need to make a decision.
Following Market Trends
Market trends are changing according to increased differences in tastes and preferences.
One of the popular new market trends is renting out houses which have already been furnished. Some renters highly dislike the hassle of moving their furniture from one house to another for reasons such as overwhelming costs and the tedious work it comes with.
Also, some renters do not want to worry about renovations including the décor of the apartment or which new wallpaper to install once they move in.
Apart from that, some renters have temporary situations such as school or work which makes them further attracted to already furnished houses. However, is the extra money and effort really with it?
Prioritize Important Furnishings
A furnished house is where the landlord provides most of the furniture but not all. How much furniture is provided is always at the discretion of the landlord. It is up to you to provide essential furnishings.
A great example of smart furnishings in the home would be kitchen appliances. These include large appliances such as a stove or refrigerator, and small appliances such as a microwave, a coffee maker, dishware or utensils.
The bedroom should include furniture such as a bed, nightstand, makeup closet, and a nightstand. In the living room you could provide sofa sets, a coffee table, a bookshelf, and a television.
Furnished Homes Appeal to Tenants
Furnished houses are appealing to a specific group of people. Students are one of the prime groups who appreciate a furnished home. Considering the fact that they are in school, they likely do not want to incur the costs of buying new furniture or hiring movers to move their property.
Another lucrative group of people is business people. If they are on a work trip or temporarily working in a new town, a furnished house will be the most convenient option for them to rent.
Some people might love a furnished house simply because they are not interested in buying property just yet while others might need a furnished house as an experiment on how living in that area would be before buying their own property. Either way, furnishing your home can make for a happy tenant.
Pros of Furnishing Your Rental Home
Furnished houses cost slightly more since people are willing to pay for convenience. However, as a landlord, you need to carry out a thorough research on the rental market in your area.
You need to charge rent high enough to cover the extra items you provide, but not too high to price your house unit out of the market.
Higher Security Deposit
A house full of furniture will definitely need a higher security deposit to ensure more protection of the property. This will ensure that you have enough funds to cover for damages that might have occurred during the period of the lease with the tenant, such as torn sofas or broken coffee makers.
Less Damage to the Property
Since you have already furnished the house, there is no need for the tenant to bring in their own furniture. There is therefore no moving of large and heavy furniture which would otherwise cause a large magnitude of scraping, smacking, and general wear and tear on your floors and walls.
Embrace the Specialization
Furnished houses appeal to a few specific people. You, therefore, need to understand who exactly wants the rental unit which will enable you to narrow down further into the various categories.
Doing this gives a clear picture of how much to budget for the necessary advertisement costs to reach your target groups.
Provide Options to Tenants
If you have a similar line of houses, you could furnish a few of them to suit the interests of those that love houses already provided with furniture. Doing this, you will have two different groups of tenants, those preferring furnished houses and those preferring unfurnished houses, each served with their best options.
Cons of Furnishing Your Rental Home
High Investment Cost
Furnishing costs more in terms of managing and maintenance costs. You need to ensure all appliances are well maintained for your tenant.
The majority of people that are attracted to furnished houses are mostly in temporary situations. They are more likely to move out once they are done with their temporary situation. This can mean renting your home out on a month to month lease.
Consider Renting a Furnished Home
If you have tenants available, it is sensible to consider furnishing and renting out your house. Below are some checkpoints to help you consider this.
The most appropriate locations for furnished rental homes are around colleges and near business districts or corporate centers.
Students and business people would prefer furnished houses near their schools or businesses since it reduces the costs such as transport.
You need to study the market in your area to find out if there are people willing to rent furnished houses for their convenience. Once you find these people, be sure to conduct thorough tenant screening.
Your rental fees should match with the standard amount within the area. Charging exceedingly high will not attract people, it will deter them.
In a Nutshell
Furnishing your house for rental purposes needs to be a good match for your market. This can offer you increased revenues as well as open you up to new markets. The cost at first instance might be high, but it does not compare with the potential gains you will get at the end.
At SCUDO Real Estate, we offer the best advice and tips that will help you increase your marketability.