With the housing market booming, owning a rental property is the golden ticket to passive income. But how much more can you squeeze out of your cash cow while keeping your expenses low?
Choosing between furnishing and not furnishing your rental property can be a difficult decision to make that has the potential to completely change your market offering, price and tenant turnover. Here are the factors to consider when trying to optimize your rental property in today’s rental market.
Understanding your rental offer
Depending on the type of rental you offer on the market, it may make more or less sense to invest in furnishing your rental property. For example, if you list your place on sites such as VRBO and Airbnb, furnishing it is essential – and expected!
Other types of short-term rentals – those that range from a few weeks to a few months – will also require you to furnish your property.
But when it comes to long-term rentals or leases of a year or more, the answer to your question may not be so simple.
Long-term renters might not want to feel like living in a hotel room, and they might prefer to make your property their home. But remember that almost half of the tenants between 25 and 34 years old will only stay in the same accommodation for less than two years! Ultimately, in addition to your market offering, it’s essential to look at how the market is changing and what tenants in your target demographic are looking for.
Making It Work: Affordable Home Furnishings and Financial Aid
Many landlords choose to offer unfurnished rentals due to the cost and effort required to furnish them. After all, furnishing a property with essential amenities can be expensive. between $2930 and $5450. And the price can reach $4,100 to $7,600 if you want to add non-essential touches to necessary amenities.
But with the right strategy, furnishing a property doesn’t have to be expensive.
For example, you can choose to invest in stylish yet very affordable home furniture from brands like Overstock, Home Depot, and Ikea.
Alternatively, if you want to create a luxury rental space for business travelers or affluent families, you can consider the low rate personal loans from SoFi. Thanks to this alternative, you will no longer have to choose between dipping into your savings or earning up to 30% more on your monthly rental income.
Fully furnished or semi-furnished rental: what are your options?
Generally, furnished rentals are the properties that are equipped with all the necessary furniture, equipment and appliances for tenants to move in immediately and live comfortably. However, depending on the type of property you manage, you will not have to choose between renting an unfurnished property and a furnished property!
While a turnkey solution with much-needed amenities like coffee tables and details like artwork is perfect for short-term rentals, you can offer a semi-furnished property to your long-term tenants. term. In this case, you will provide the necessary appliances and furniture, which allows a long-term tenant to move in immediately but offers greater potential for customization.
The pros and cons of furnishing your rental property
Furnishing a rental property may seem like an unnecessary expense at first glance, but this choice comes with inescapable advantages. These include:
- The possibility of increasing your monthly payments 15-20% asking price
- Faster tenant turnover
- The ability for tenants to move in quickly can be a decisive competitive advantage for some!
- The ability to deduct the cost of certain furniture from your taxes as part of the cost of running a business
- Protect your property from damage that several moves and transport of your tenant’s furniture may cause
- The possibility of charging a higher deposit – up to three months’ rent
- The ability to cater to a particular type of tenants or guests, such as business travelers or families
Furnishing a rental property can also have drawbacks. For example, the increased turnaround time might not offset the cost of furnishing your apartment. Or if you decide to move from a short-term lease to a long-term lease and lose tenants who prefer to furnish their homes.
Choose the right option depending on the type of rental you offer and the price you want!