How to Charge More for Rent With a Furnished Rental
When entertaining the idea of furnishing a rental property, your first move should be to understand the local marketplace. Start by seeing if furnished rentals are succeeding nearby. If they are, you may be in luck.
Of course, with the advantages of renting furnished units, there are always a few drawbacks. The furniture you own there will degrade and you’ll need to replace it. Tenant turnover will likely be higher as well.
However, if the market’s right, you may be able to raise the rate for your rental. Take a look at our helpful guide and learn how to charge more for monthly rent with a furnished rental. You may find these ideas fit your needs and financial goals.
Furnished Rental Property Fundamentals
When tenants seek out a furnished rental, it’s usually because they’ve got a short-term need. And that temporary living status is usually best suited with a rental that’s ready to live in. Here’s what you need to know about furnished rentals:
Most furnished rentals are paired with short-term leases. A quick example to consider is an individual who is relocating to the area and has yet to find a more permanent home. Longer-term leases usually appeal to tenants with their own furniture.
The furniture should match the rental’s target demographic. A high-priced rental located in a swanky part of town will rent more quickly with high-end furnishings and amenities. Cheap furniture will be poorly received, and the space may not be rentable until adjustments are made.
There must be a local need for temporary housing. Although you may want to rent short-term, if your rental’s location isn’t right, you’re wise to reconsider. Short-term rentals are often found in university towns, where student populations bloom during the school year.
Professionals on temporary assignments may also seek this type of arrangement too. They’re looking for a property that is within walking or commuting distance to work.
The Benefits of Furnishing Your Short-term Rental
Furnished rentals offer many benefits, both to property management and the tenant. Here a few reasons why furnishing your rental property can be beneficial:
Tenants love the ease-of-use. Younger tenants and new hires that have recently moved into town value their mobility. And they may not have the funds to purchase an entire apartment’s worth of furniture. Furnished, short-term rentals give them the ability to live in a space that suits them and they get to avoid making payments on furniture.
Tenants save money and are spared the hassle of moving. Moving can be stressful. It’s even more of an issue when money’s tight and moving labor costs are so high. Furnished rental security deposits may be a bit higher, but tenants don’t seem to mind.
Tenants are shopping for amenities and appointments. More than seeking a place to live, short-term tenants are looking for unique features in furnished rentals. Novel, eclectic style and décor add to their quality of life and become a factor when it’s time to make a decision.
Landlords can charge significantly higher rent. Micro-tenancies may be a bit more to manage. But the opportunity to capture big profits from a rental space can make it worth the effort. Rates for furnished rentals are usually fifty percent higher than their unfurnished counterparts.
The Benefits of Leasing a Long-term Furnished Rental Property
Long-term leasing of furnished rental homes and apartments has its benefits too. The appeal of moving into a “turnkey unit” is becoming a popular option for interns, executives and families whose permanent living spaces are undergoing renovations. And they’re paying a high price for such a service. Take a look at the reasons why furnishing your rental property — and combining it with a long-term lease — may really benefit your business:
Tenants find them cheaper (and better) than corporate housing. Even with an inflated rental price, leasing for a few months is still less expensive than staying in a hotel. And by customizing your space, your unique designs are competing directly with today’s corporate housing.
Tenants are more financially stable. If you’re looking for a more “hands off” approach to your rental income, this may be a good way to go. Remember to thoroughly vet your tenants in order to help guarantee they’re able to afford your property.
Units like these are in high demand. In the right neighborhood, furnished property rentals can be difficult to find. Much of your target demographic is typically from out of town. Many applicants are looking to get settled quickly — and vacancy rates may be lower than unfurnished rentals.
Landlords have furnishing options. If you don’t have an entire home’s worth of furniture, groups like CORT and Brook Furniture Rental allow you to rent everything you need. Selecting items online and getting them delivered quickly to your space puts your rental in competition with high-rent properties in your neighborhood.
Landlords can charge more rent by requiring professional cleaning. Including a clause in your rental agreement that requires the tenant to pay for a monthly cleaning service can benefit you and the tenant. You’ll be able to bump the cost of rent up a bit more, and your tenants will love coming home to a sparkling clean place.
Landlords can up the rent by including utilities in the rental fee. Keep the bills in your business’ name and cover the cost of water, heat and electricity. With these conveniences covered by the rent, tenants will find that their monthly out-of-pocket expenses are more predictable.
Remember to include terms in your lease that caps the heat and AC to reasonable levels. Install smart home thermostats that can give you historic data on temperature settings to audit tenant use.
Landlords can bundle parking and monthly rent into a single fee. Tenants new to town will likely want a place to keep their car. And if you’re offering a protected and heated space, that’s all the better.
The Benefits of Insuring Your Furnished Housing — and Requiring It of Your Tenants
Because your property is populated with expensive furniture and high-end amenities, you’d be wise to require tenants to purchase rental insurance. If something should happen to your property and they’re found liable, coverage for replacement or repairs kicks in once they meet their deductible, up to the policy limit.
And customized landlord protection for your real estate investment plays another key role. We’ve got a wide array of insurance options available to meet your business needs. Your American Family Insurance agent can work with you to build a great policy. Your furnished rental will have the coverage it needs and you’ll be able to advance confidently in the direction of your dreams knowing your investments are safe.