As landlords, we want to maximize the return of our investment property. Simply put, a renting out furnished property can bring in 25 – 75 percent more income than an unfurnished unit.
Of course, there are challenges involved in renting out furnished apartments. The lease is typically shorter, so you will be turning over and tenanting the property more frequently. This involves marketing, screening, showing, and signing the rental agreement multiple times per year. And, there’s the added risk of having your rental property remain vacant for periods of time.
There’s also the cost of furnishing the unit and the wear and tear of the furnishings over time.
But risks and costs aside, short-term furnished rentals can be very lucrative. Here’s a few things to keep in mind when choosing this avenue for your investment rental property.
Types of Guests
The first thing to think about when considering renting our furnished property is the types of guests you should expect. We operate in Toronto and will be running a pilot program to offer short-term furnished property rentals to our clients. These properties are located downtown Toronto. We expect the guests, like many of our long-term tenants, to be young professionals from around the world moving to Toronto for work or post graduate education.
Short-term furnished rentals are an excellent option for people visiting a city for an extended stay but less than a year. It allows them to move with ease; without packing up their life and setting up a new apartment, while still giving them a sense of home unlike a hotel.
Because we are expecting professionals and post graduate students, it’s important to factor in locations where these types of tenants would wish to stay. In Toronto, that would be downtown, near universities and business districts.
Short-term furnished rentals are probably not suitable options for investment properties in rural and suburban areas. Those areas would most likely house tenants who are happy to stay put for several years.
Interior Decorating and Interior Design
The aesthetic appeal and functional design of the rental property will dramatically factor into the listing price when renting out furnished property. Adding a well thought out, premium touch to the suite will allow you to ask for more. After all, the tenants are not just renting the space, they are renting the furniture.
Consider working with a professional team while designing and decorating your rental property in preparation for short-term leasing.
One of the major benefits of renting furnished for tenants is moving in without having to go through the typically tedious task of actually moving. You can build on that experience by making their move-in as easy as possible. Consider how you can simplify their move-in. In some cases, transportation to and from the airport is provided.
What will you include in your short-term rentals? You will most definitely have to go above and beyond the common offerings of a long-term lease. You should definitely cover the electric bill, and also internet. You might also consider including cable packages, A/C, and more.
If you are considering offering your investment property as a short-term furnished rental and would like to outsource the management, please do not hesitate to contact us. Schedule a call with a professional member of our team today.