Renting out a furnished property is not the same as renting out a regular, empty property. Although the rules for attracting and screening tenants don’t change, furnished properties come with their own sets of challenges and these need to be considered before you turn your home into a furnished rental property:
1. A rental property that comes furnished can get 25% to 50% more than an unfurnished property, which is a significant advantage in areas like Vancouver where you might have a difficult time making a profit each month from your rental property. However, even though your rent is higher, your costs for a furnished property are higher as well. It costs at least $10,000 to furnish the property, as well as the cost each month for all utilities (water, hydro, gas, phone, cable, Internet, security, etc.). Today’s furnished rentals also often come with cleaning services, which are paid for by the landlord.
2. Fully furnished means that someone only needs to arrive with their suitcase. You are providing everything someone would need to live in your home like:
– all cookware, dishes, glasses and utensils,
– appliances like blenders, coffee makers, food processors,
– sheets and towels,
– cleaning supplies like brooms, vacuums, and shovels (if applicable),
– amenities like television (with cable service) and wireless internet are pretty standard. Basically if a hotel suite would have it, your rental unit should too!
3. Expect to have to rent some items you hadn’t thought of. Children’s furniture, like cribs and highchairs, may be needed for some tenants, while others may require special computer desks or filing cabinets because they work from home.
4. Remember that although you own the property, it is not your home. It’s not the place for your family heirlooms or pictures of your family. If you have any of these in the house, remove them before the new tenants arrive.
5. Make sure you create an inventory list of everything that is in the property and it’s condition. You’re going to need this for the initial walk-through with the tenant. This walk-through is similar to, but is going to take much longer than the initial walk-through for an unfurnished property would. Having an inventory is very important in case anything is damaged or goes missing, as this information will be required when you need to replace an item. After the walk-through with the tenant, be sure to have them sign off on the document so that you have proof that they have acknowledged what was in the property before they moved in. This document will also be used when the tenant moves out, to verify that no items have been damaged or stolen.
6. Remember, accidents happen, and with breakable things like plates, glasses or mugs they happen quite often. Since these items get broken so easily, it’s a good idea to always have extras of these things on hand. Buy an extra box or two so that you always have a matching set.
I wanted to share these lessons learned with you in case you are thinking of renting a furnished property as a way to bring in more cash from your rental. It is definitely a great way to make some extra cash off your home if you’ll be away for awhile, or to capitalize on the upcoming Vancouver Winter Olympics. Just remember that it’s not without some challenges.
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