Furnished Vs UnFurnished Rentals

Furnished vs Unfurnished Rentals

Macy’s question: Furnished rentals verses non-furnished rentals.

This question comes a lot from clients that have places with furniture. We always persuade them from it because the logistics are over the top. A furnished rental would typically be a short-term rental. Someone will rent it for a short period, like somebody who sells their home, so they might want to take your rental for three or four months. The actual problem with that is that the turnover is just going to be real, and having to find another tenant is going to cause you some vacancy.

So with the short term rental, you could definitely charge more rent, so that’s a pro. However, the turnover is going to be very daunting, and of course the vacancy gets extremely expensive. The other problem is, just trying to categorize in detail the condition of the furniture and trying to charge somebody for is going be a total nightmare. I would recommend charging a separate security deposit for the furnishings, but documenting would be a challenge. I would recommend doing it with a videotape, but then it’s going be a lot of work going through the videotape and trying to prove the damage that somebody did.

The one thing I would suggest doing if you want to rent furnished would be to try reaching out to folks who do something called Airbnb arbitrage. That’s where somebody will be running a business through your rental as an Airbnb, but they will not own the property, rather, you’ll own the property. Their big expense is that they’re going to rent your property for a year or more/less. They will run it as an Airbnb and their overhead is going to be that they have to buy all the furnishings, and everything one needs for an Airbnb. It’s a lot. It’s more than you think, because for an Airbnb to be run successfully, you will need the following: a couch, bed, bedside table, coffee table, rug, dish towel, fork, spoon, knife – and the list goes on.

So if you were to provide a property that is furnished and you were to rent it out to an Airbnb arbitrage. They would likely pay you more rent. There’s going to be slightly more wear and tear on the property in my mind. Meaning, if it was a long-term tenant, they would be a little more careful about what they flush down your toilet and put down your drains, and to unclog these items are really not that much of an expense as one might think. The benefit of Airbnb arbitrage is that every time somebody stays and leaves, the property’s getting refreshed; housekeeping is coming in and making the property renewed.

A lot of the damage to the units might be the uncleaned stove, bathtub or shower not getting cleaned properly. With an Airbnb, the advantage is that someone will get these amenities more frequently cleaned and maintained in good standing for regular inspection. Therefore, I would recommend staying away from trying to rent furnished, unless you can find an Airbnb arbitrager or maybe trying to do that yourself. Airbnb makes it very easy. Good luck!!!


Joe White

Joe White is a Philadelphia Property Manager and Real Estate Broker. He is the owner of Grow Property Management and has been involved in the management, sales and purchases of Philadelphia area rental investment properties since 2008. He is an author and works as a real estate investment consultant and construction manager.

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