Deciding on whether to furnish your units can be tricky and vary based on location and target demographic. We’re going to take you through the possibilities, the risks, and the rewards of using rental furniture in your rental properties.
Is Furnishing Right For Your Property?
Pros
If you live in an area with lots of people looking to rent a furnished place, then furnishing will be a great advantage, and you’ll have a lot more people looking at your units. Move-ins will be fast and less risky to your building’s well-being. And of course, one of the most significant advantages is you’ll also be able to charge up to 30% more and claim the furniture’s value on your taxes.
Not furnishing your unit could incur some unique risks. You do not always know what kind of furniture your tenants will bring into the rental—heavy or improperly assembled furniture could cause damage to your unit and pose a safety risk. Depending on your state, there are some restrictions you can place on tenants regarding the type of stuff they can bring into the unit.
Cons
There are benefits of not furnishing. Some tenants may like customizing the look and feel of their home and will not want to have to work around the furnishings picked out by you. You also won’t have to deal with picking out, purchasing/renting, and moving all that furniture.
Always be discerning when choosing tenants in any rental, especially if you have decided to furnish. Not only do you have the potential of a tenant causing damage to the furnishings, but smaller appliances and items could be easily lost or stolen (TV remotes, blenders, linens…). Tenant’s moving into a furnished unit will also expect things to be in a quality condition. You’ll have to take extra steps between tenants to be sure the apartments maintain a clean, comfortable quality.
Should You Rent Your Furniture?
Pros
Rental furniture is relatively cheap, and you’ll be able to increase your rent. You’ll also be able to regularly switch up the style of the furniture keeping on trend with the new and remodeled competitors.
Once you’ve already rented out the place furnished, you can use pictures of the unit for advertising the space with the option of furnished or unfurnished. If the tenant wants it furnished, you renew your lease with the rental company, and if not, you can end the contract and send the furniture back from where it came. This is a great strategy to widen your potential tenants.
Renting furniture can be a relatively painless and lucrative process. Many companies allow you to shop for individual or entire sets based on the room. Depending on how much you rent and for how long will influence what it will cost your tenant. For example, if the agreement you sign comes out to $290 per month, you could raise the rent by nearly $400. That’s the right amount of extra income from your property.
Cons
There are many ways of renting furniture that could harm your business. Consider whether you can afford the risks of furnishing your apartment. Investing in higher quality rentals, like durable, stain-resistant furniture, may mean less wear and tear and less risk.
Renting furniture can have many expenses. Consider things like insurance and maintenance when figuring out costs. Read the rental agreement carefully and consider things like interest rates wisely. The rent itself may be low, but over the full term of the lease, you may end up sinking much more money into furnishing your units than you anticipated.
You’ll also want to be sure to pay on time and be sure you have a solid contract with your tenants as ending a furniture rental agreement early can be costly, as well as if there is damage you may be held responsible for the entire cost of the piece.
What Do You Get When You Rent?
Furnishing your apartment with rental furniture is an excellent option for the right property. You’ll likely want to aim your advertisements toward single people, immigrants, and students as they are likely to be in transition without a lot of stuff. If your property is in an area with one or more of those demographics, than a furnished unit can give you an edge in the market.
Be sure you know the laws regarding what landlords have to provide and the standard in your area. Do your research and proceed as an informed property owner. If you feel you need some assistance and property management company can be a great way to help lift you with a competitive advantage.
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