Is the extra money and time it takes to furnish an apartment is worth the work?
Property owners often make tough decisions as to what rent-included perks they offer their renters. For many years, utilities-included rental options (heat, energy and water) were a competitive advantage. Nowadays, additional specialized markets have arisen to address more specific renter needs (like small-space studios), so property owners must adapt and offer new services to fit these changing market needs. One such marketplace is fully furnished apartments. Some renters don’t want the hassle of moving furniture into an apartment or worrying about choosing décor. Appealing to these renters often depends on whether the extra money and time it takes to furnish an apartment is worth the work.
The Pros of Furnished Apartments
There are two large categories of renters looking for fully furnished apartments. The first is the traveler, who stays in town long enough that they want more than a hotel room, but they’re not interested in owning property. This could be anyone from a relative who doesn’t want to impose on their family to a businessperson managing projects over a few months. These will be short-term tenants, but they will have budgeted for a fully furnished unit because to them it’s a necessity rather than a convenience.
The student is the second type of renter who prefers furnished apartments when looking for rental options. They may be fresh out of the dorms with little of their own furniture or perhaps they’ve travelled far without much of their own to move in. The last thing they need is a large debt from a number of big purchases all at once. Paying a higher monthly rent for a furnished apartment is easier to budget for.
Moving is a very stressful time in a person’s life. The more to-do items that can be taken off their plate, the easier a move can be. Not dealing with movers or big pieces of furniture can make a furnished apartment seem very appealing. For someone moving across the country, not having to devote time to furniture shopping means they can focus on the reasons they moved in the first place. These sorts of moves might also occur if the tenant is building a home and dealing with construction delays.
The Cons of Furnished Apartments
More services required of the landlord generally means higher rent. The location of a rental property often influences the amount of rent paid. Include furniture and you can push the rent higher, which sounds like a pro. But it can be tricky to find the sweet-spot: a monthly rental fee high enough to cover the extra items provided, but not high enough to price the unit out of the market. It also means adjusting any security deposit for damages to the furniture. Cleaning and replacing furniture means more work on your end between tenants, so it’s another thing you have to add to your maintenance schedule. Preventative maintenance can help, but if a tenant trashes a piece of furniture, it’s up to you to replace it.
Renters looking for furnished apartments are often looking for another big feature: a short lease. Many furnished apartments owners offer leases for less than a year or even month-to-month. Furnished apartments are often viewed as temporary housing during a transitional period in a person’s life. Beyond travelers and students, these apartments are often desired by people who have just made big life changes like starting a new career in a new city or dealing with a divorce. They might have also had big life changes thrust upon them, like the death of a loved one. So while you’ll be able to collect a higher premium per month, you’ll be working harder and more frequently to fill your space up with new renters.
Good Markets for Furnished Apartments
Properties located near a college make good candidates for furnished apartments. Anything within walking distance is an obvious choice, but also consider locations on major transit lines to the school. College towns can have a bit of a larger radius, but remember: most students that can’t afford furniture may also have some trouble owning a reliable car. Inexpensive furniture for these apartments can be easily found. Students want comfort and cleanliness instead of high design and visual appeal. Most students looking for furniture cruise resale shops for recycled sofas. There’s no reason a landlord can’t do the same. Washable slipcovers are an effective way to cover a variety of imperfections! And a fresh coat of spray paint can work quick wonders to update and refresh old tables, chairs, shelves and desks.
Furnished apartments near an airport appeal to many traveling renters. Sometimes, your renter might want a place to relax, repack and get ready to head out on the next plane. Locations near other modes of transport can also reflect these ideas such as those by bus or train stations. These apartments should have a bit more style and interior consideration. Business travelers might not be able to afford five-star hotels every night, but they want a place that reminds them of home and offers sophistication and security.
Whether or not you decide to furnish a property depends primarily on the market in which that property is located. If it’s near a college, a furnished apartment would appeal to students who don’t have many of their own possessions to move into a rental. If the property is near an airport or other travel hub, business travelers will appreciate a furnished rental without the prices of a nightly hotel. Be aware that furnishing your apartments will create some unique challenges to overcome like shorter leases, higher upkeep cost, and higher renter turnover rate. However, in the right place at the right time, a furnished apartment can be the perfect place for someone to temporarily call home.
First Image “178 – I Live in IKEA” courtesy of Flickr user Hillary licensed under CC by 2.0.
Second Image “AFTER!” courtesy of Flickr user Justin Snow licensed under CC by 2.0.
Featured image “Budapest 2010” courtesy of Flickr user Daniel Stockman licensed under CC by 2.0.