In the past, landlords may have offered things like free utilities as a way to attract renters, as a way to gain an advantage over your competitors. But now, different markets have grown in popularity, encouraging property owners to provide additional services to meet the changing demands of the markets.
One market is the furnished market, and we at MN Property Nerds believe it can be a lucrative one. This is why we have put together the following article.
As a landlord, you may get confused about what a “furnished” unit entails. But there’s really no strict list to follow. In the end, it’s your decision what to provide in your furnished space. But generally, furnished rentals have:
A lot of people are attracted to furnished rentals for a variety of reasons. But the typical ones are tourists, students, or people on business, who are in town only for a short time. Also, those looking to move to a particular neighborhood and test the waters by renting first.
Staying in hotel rooms can be pricey after a couple of days so some prefer to rent furnished units. If they rent an unfurnished unit, it can also be a waste of money as the duration of their stay is temporary.
By staying in a furnished property, one can just focus on their objective, maybe to enjoy a trip, participate in job training, or complete a study course. So, furnished units meet the needs of these short-term renters. Even if the price is higher than usual, it’s what they’re looking for.
Given the convenience that a furnished unit provides to its renters, a landlord can set a higher rent price. But you still need to analyze the market to find the right rent. If you charge too much, then prospects may lose interest. But if you charge too low, then you won’t optimize your earnings.
Check out your competition in the neighborhood and how much they’re charging. You want to set a price that includes the extra benefits your unit provides. Keep in mind that you should charge more for shorter stays, such as a month, than longer stays, around 6 months.
Since your rental unit comes with furnishings, you’re naturally exposed to more risks. It’s logical then to ask for a greater amount for a security deposit. When your lamp is broken, you can access the funds to replace it.
For even more protection, you can place an additional addendum in your rental agreement to include specific details, reducing confusion and future conflicts.
Moving large furniture items can result in more dents, scrapes, and scratches in your rental home. If your furnishings are all in place, you can easily protect your walls and floors. There won’t be a need to spend repainting a portion of the unit or removing the scrapes.
Knowing that particular groups of people are looking for furnished units, it’s much easier to design a marketing campaign around them. This means saving a lot of time and money in advertising since you have the end users already in mind and can reach out to them.
As a landlord, you’d need to set a budget to purchase furnishings – which can be hefty. They can also be at risk of damage. This requires you to schedule regular cleaning and perform preventive maintenance as delaying repairs can also mean bigger expenses in the future.
Furnished rentals attract short-term renters. As a landlord, you’d need to market frequently and conduct tenant screening. If your market is students, then once the semester is over, they can move out. If you target tourists, then a few days or weeks is all the time they can stay. Though the rent you collect is higher, you need to advertise your space continuously.
At MN Property Nerds we believe landlords, looking for extra funds, to consider furnishing their rentals. But there are some things to mull over:
In the end, you should know your target market and your rental environment before choosing to furnish your rental property.