If you own or manage a rental property, there are several things you can do to make your property more attractive to prospective renters. One way to set your units aside from others in a saturated rental market is by partially or fully furnishing your rental property. This is a smart move because it allows you to charge a premium rent for your units.
In this article, we debate the pros and cons of furnishing your rental unit and some best practices to observe when doing so.
Furnishing your rental property: key takeaways
- The main advantage to furnishing your income property is that it allows you to charge approximately 15 to 20 percent more in monthly rent. Furnishing enhances the look and feel of your units, making them more attractive to prospective renters. You can also target the business travel segment by furnishing your rental.
- The main downside to furnishing your rental is the upfront cost. You will also have to shoulder the expenses associated with the wear and tear of the furniture, cleaning the furniture between tenants, and replacing the furniture in the event that it is stolen, damaged, or becomes outdated. There’s also no accounting for personal taste, so there is always a chance that prospective renters won’t like the way you’ve chosen to decorate.
- The key to furnishing a rental is to use pieces that look high-end, but won’t break the bank. It’s best to stay away from items that (a) are very expensive, (b) will be difficult to replace, and/or (c) have sentimental/emotional value.
- While you should keep your costs low, you don’t want to sacrifice quality. Whenever possible, shop for items on sale. You can also consider second-hand items from online marketplaces, moving sales, garage sales, and estate sales.
- When furnishing a rental, aim to provide the basics. Avoid overcrowding and stick to a few basic furniture items, one or two pieces of artwork, and minimalistic lighting fixtures for each room. Avoid any furniture that’s visually bulky or too big for the space.
- You’ll want to keep track of each furniture piece, its market value, where you purchased it from, and its condition. You should also take pictures of each piece before a new tenant moves in. You can then provide a copy of this record to your tenants, so that they are aware of how much everything is, should anything go missing or incur damage.
- Include a stipulation in your lease agreements that clearly states that tenants will be held liable for lost and/or damaged items.
Pros and cons of furnishing your rental property
- You can charge more rent for a fully- or partially-furnished unit. According to sources like Zumper and Apartments.com, landlords can typically charge 15 to 20 percent more for a furnished long-term rental. This is because you are adding value to your unit and saving your tenants the cost and hassle associated with furniture shopping. As such, units that are furnished usually have a competitive edge on the market.
- You can control the aesthetics of your units by furnishing them. If you choose to, you can give all your entire property a cohesive feel by using similar or complementary furniture in all your units. This can be advantageous when prospective renters are touring your rentals because you can enhance the look and feel of your units using furniture and decor.
- You can target the business travel segment by furnishing your rental. People who travel for work tend to have a budget to cover their living expenses, so they can typically pay a premium for rent.
- You’ll end up spending more money upfront by furnishing and decorating your units. You will also have to shoulder the expenses associated with the wear and tear of the furniture and cleaning the furniture between tenants. You will also have to deal with replacing any pieces that are damaged or stolen or become outdated in terms of style.
- There’s also no accounting for personal taste. Even if you choose furniture pieces that are relatively neutral, a prospective renter could decide against renting with you if they (a) don’t want furnishings, or (b) don’t like what you’ve selected for the unit.
Best practices for furnishing your rental property
Find pieces that look expensive (but aren’t expensive)
The key to furnishing a rental unit is to use pieces that look high-end, but aren’t actually too expensive. While you definitely want you units to look nice, you can’t control how well your tenants take care of the furnishings, so it’s best to stay away from items that (a) are very expensive, (b) will be difficult to replace, and/or (c) have sentimental/emotional value. A good rule of thumb is to shop on sale.
If you’re going the retail route when furnishing, a good place to start is IKEA, where you’ll pay a pretty reasonable rate for simple and functional furniture. Some other retailers that have similar offerings to IKEA include Structube, Parliament Furniture, and The Brick.
If you’re on the hunt for a bargain, a great avenue to explore is used furnishings. Craigslist, Kijiji, and Facebook Marketplace are all great places to shop around for furniture and decor of all types, and if you’re lucky, you might even be able to score some items for free. You can also shop around for some high-end items at moving sales and estate sales. With anything second-hand, make sure you thoroughly sanitize the items and repair them if necessary.
With that all said, be very wary of second-hand soft furnishings and upholstered items. Anything with a fabric element is prone to bedbugs and other types of pests. These types of items are also tougher to get completely clean.
Keep it simple
When furnishing a rental, it’s not necessary to provide more than the basics. Overcrowding the unit with furnishings and accessories could end up making the unit feel smaller than it is. Additionally, you want to give prospective renters the chance to personalize the unit to a certain degree.
When decorating your rental, stick to a few basic furniture items, one or two pieces of artwork, and minimalistic lighting fixtures for each room. Avoid any furniture that’s visually bulky or too big for the space.
Document pieces and their conditions
Once you’ve picked out and purchased all of your furnishings, your next step should be to create an inventory. You’ll want to keep track of each furniture piece, its market value, where you purchased it from, and its condition. You should also take pictures of each piece. You can then provide a copy of this record to your tenants, so that they are aware of how much everything is, should anything go missing or incur damage. And make sure to inform tenants—in writing—that they will be liable for anything that’s stolen or damaged. To be safe, you can include this stipulation within your leasing agreement.
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