How Sinking a Few Dollars into a Great Furnished Rental Will Pay Dividends in 2023
There are a few primary tools and techniques to consider if you want to optimize the potential passive income from renting out your investment property. Raising rent, monthly petting fees, and utility subdividing are standard methods used by property owners to maximize their returns on investment.
Landowners may, however, use another tactic to increase their future passive income: furnishing the rental. This is a simple and cost-effective way to increase the value of your property and enhance the rent you can charge. In addition, they offer a furnished rental appeal to a more affluent, mobile audience that is willing and able to pay a premium for the comfort of a fully furnished rental.
If you would like to learn how you can use the equity you have in your property to pay for the furniture for your furnished rentals, click the link below to book a free strategy call with our team at LendCity.
The Fundamentals of a Furnished Home
Fully furnished rentals must provide all of the requisite appliances, furniture, and accessories for a comfortable stay. This includes sofas, beds, tables, and other furnishings. Although the degree to which you furnish your rental property will ultimately depend on personal choice, keep in mind that the simpler it is for a tenant to move in, the higher the price you will command.
Of course, furnished rentals may not be desirable in 9certain markets. For example, rural or outer suburban real estate markets may not have the same demand for furnished rentals in dense, urban areas where modern professionals reside.
A Little Bit of Furniture can Go a Long Way.
Although furnishing your rental units is not appropriate for every property or industry, it makes a lot of sense for developers who operate in densely populated areas with nearby strong business centers. Consider what furniture can do for your rental—and, more importantly, your investment potential:
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Improving Rental Income
One of the most significant advantages of furnishing a rental property is that you would be able to command higher rentals right away. People are willing to pay a premium to live in a space that has already been furnished and prepared for them. Furniture is a one-time purchase that will boost your operating profits.
Higher Fees and Deposits
Furnished rentals not only allow you to charge higher monthly rental rates, but they also allow you to charge a variety of one-time fees and deposits. For example, you might charge a deposit equal to the value of the unit's furniture. Similarly, as tenants move in or out, you can charge them a cleaning fee for the furniture.
Attracting Tenant Pool
Furnishing your apartment helps you to attract a highly desirable tenant pool. In addition, since many people searching for furnished rentals are single, urban professionals, you won't have to worry about micromanaging the unit during their stay.
Flexible Renting Option
Another significant advantage of a furnished rental is that you can adjust the type of rental you provide depending on the season and demand. For example, in the summer, you could rent out the unit as a short-term vacation rental, and in the winter, you could convert it to a monthly corporate housing unit.
How Can You Furnish a Rental?
A fully furnished rental property aims to provide a comfortable environment for tenants to move into. You should have taken care of the heavy lifting, so they should not have to think about bringing anything other than their suitcases and one or two boxes into the unit.
With that in mind, there are a few guidelines to keep in mind when furnishing a rental house, whether it's for short-term vacation rentals or long-term residency:
Understanding Your Target
Consider your target audience when purchasing furnishings and decorations for your rental property. For example, if you want to cater to urban professionals, choose furniture with a sleek, neutral style and fit in a corporate office lobby.
Creating a Budget
Before you go furniture shopping, you can create a budget that details how much money you're going to spend on furnishing your home. You should look for affordable furniture; however, you should never find furnishings that appear to be cheap, as this will lower the perceived value of your rental.
Establish a Style
Establish a unified design aesthetic and stick to it. Purchase furniture and accessories that complement each other and work together to create a cohesive, easy-to-identify aesthetic, whether you are trying to imitate the look of a creative loft or an extended-stay hotel.
Do not Forget About Lighting
In many houses, there is insufficient pre-installed overhead lighting to enable people to live comfortably. You should carefully identify areas in the unit that are not well-lit and then purchase enough lamps to uniformly and cleanly lit the room. When moving into a new apartment, one of the first items people buy is a lamp, and the purpose of renting a furnished rental unit is to avoid that cost and inconvenience.
Do Not Overlook the Details
Once you have finished furnishing and decorating your apartment, think about what else you will need to live comfortably in it. Purchasing a single cutlery package, for example, will go a long way toward making the tenant feel more at ease when they first move in. The same can be said for a Wi-Fi router.
Make it Feel Like a House
Another important consideration is that the unit should feel like a home at the end of the day. Although maintaining a professional aesthetic is vital, including a few hand-made touches throughout the property will make tenants feel more at ease spending time there. This may include everything from wall art to window treatments, among other things.
You will gain a significant competitive advantage over other real estate investors in your region by renting out a fully furnished rental home. It also gives you access to a highly desirable market segment, ensuring you a higher return on your investment.
Consider getting some furniture for your strategically placed, urban property if you search for ways to boost your return on investment.
If you would like to learn how you can use the equity you have in your property to pay for the furniture for your furnished rentals, click the link below to book a free strategy call with our team at LendCity.