The phrase ‘furnished rentals’ used to bring to mind dingy couches, lumpy beds, and the very dullest of kitchen knives. However, that’s no longer the case. Today, the sharing economy and the internet have revolutionized the rental market. As a result, furnished rentals these days can feel like home, and it’s easy for a newcomer landlord or property manager to furnish his or her first rental.
It’s time to make this work in your favor.
Furnishing your rentals, even on a tight budget, dramatically increases both your property’s appeal and your rental income. Today, we’ll share 7 wallet-friendly tips to furnishing your first rental. We’ll also look into the general costs of furnishing rentals and we’ll share how landlords can save money while delivering a knockout experience.
How much more can I make?
Internationally, with the rise of companies like HomeSuite, Airbnb, and others, the short-term rental sharing economy has grown by leaps and bounds. Where travelers once looked to hotels and corporate rentals, they now look to locals with extra space and short-to-medium term rental options. And whether they’re staying for a night or for most of a year, they aren’t bringing their bedroom set with them. Renters look to property owners and managers to provide everything from welcome mats to Cuisinarts.
In return, they’re willing to pay a significant premium.
Our research shows that furnished properties rent for an average of 32% more than comparable unfurnished units. That’s just the average, though. In high-demand markets such as Manhattan, high-end renters increasingly want to pass over designer hotel rooms in favor of cozier options. New York Magazine wrote about how one furnished New York 1-bedroom rented for $5,000 a month, for example, while its bare-bones counterparts went for closer to $3,000 a month.
It doesn’t take a degree in advanced mathematics to see how premiums like this can quickly pay off any reasonable investment in furnishings. And those numbers? That was back in 2011. Since then, the demand for furnished rentals has only grown.
Money isn’t the only reason to invest in furnishing your rental property. Another incentive is found in the types of tenants one can expect to attract. One key demographic of tenants is business travelers, or those relocated for business. This group frequently lacks the time or inclination to furnish places themselves. They may only be intending to stay a few months, or they may be renting until they can find something to buy.
Others, such as traveling nurses, consultants, creatives, and young professionals, may just be relocating temporarily for a short-term contract. They know that working from home is much easier when their home comes with Wi-Fi, a desk, and coffee maker.
What will furnishing an apartment cost?
While you can easily overspend on furnishings, you can also convert an empty apartment into a comfortable, homey space for a very reasonable investment. According to our calculations (and depending to a degree on where you live), you can furnish an entire 1-bedroom apartment for about $2,200.
That sum includes furniture, kitchen appliances, and living room housewares. You probably won’t end up with a 60-inch plasma screen or a designer couch. Even so, you’ll be able to provide everything a tenant needs to kick up his or her feet in comfort.
While this kind of investment should pay for itself relatively quickly, some landlords — especially those who are just getting started — may struggle to find the upfront cash or the time to procure a whole apartment’s worth of furnishings.
Luckily, we’re here to help with some handy advice:
1. Grasp the Essentials of Furnished Rentals
First off, you’ll want to assess what sort of tenant your first rental is likely to attract.
Are you renting a three-bedroom in the suburbs? If so, think families. Do you own a studio apartment in a high rise? That’s more likely to appeal to a business person traveling solo.
Once you have a sense of whom you’ll be renting to, start to decipher what types of furnishings those people will be likely to appreciate. A family may want a bunkbed in one bedroom and a kitchen cut out for cooking big meals while a business traveler is more likely to seek out an inviting couch and quality bedding.
In terms of basics, most apartments will need:
- A bed
- Sheets and pillows
- A couch
- A kitchen table and chairs
- Kitchen appliances, such as a microwave oven, a coffee maker, and a toaster
- Kitchenware for preparing and eating food
- A television
2. Know How Much Time And Space You Can Use
Now that you understand your audience, consider the factors that limit your possibilities: that’s how much space you have and how much time you can spend.
In terms of space, it’s critical to be efficient, especially with smaller apartments and studios. The last thing a landlord on a budget needs is to end up with a sofa too large for their living room. Before you go about buying anything, measure the dimensions of your property and sketch out what you envision going where. Decide whether it makes sense to get a twin bed or a king. Anticipate whether you’ll need a coffee table or whether a side table will serve better.
In terms of time, that’s a matter of setting your own expectations. While there are a number of ways to find bargains on furniture and other furnishings (read on!), many of them require an investment of hours — even if that’s just completing Internet searches.
Decide upfront whether you’re going to sink your time into finding the perfect items or if you’re going to content yourself with items that are good enough. Afterwards, take a moment to think how you’re going to fit them into your furnished property.
3. Make Your First Rental Matter
Not all areas of your apartment are created equal. Assuming you’re working with a limited budget, you’ll be best off focusing on the most often used room in your rental. If you’ve got a studio, consider focusing on the sleeping area. For any other property, you’ll want to focus on the living room.
The living room is where most tenants spend most waking hours. Your tenants may not be totally satisfied if there isn’t a reasonable mattress on the bed. However, if the living room is unattractive, uncomfortable, or poorly furnished, they’re unlikely to rent from you in the first place.
For these reasons, we recommend apportioning a larger percentage of your budget and time on furnishing your property’s living room.
4. Create a Balanced Budget
While we’ve outlined how much it may cost to furnish an apartment, deciding how much to spend is up to you — and you should make that decision now. Whether you’re going to invest $2,000 or $20,000, setting a budget will allow you to make intelligent decisions about how much to spend on individual items.
According to research conducted by HomeSuite and Zumper, the general formula is to spend 45% of your budget on the living room and 32% on the bedroom. That leaves 23% for the kitchen and the bathroom — assuming both already have fixtures and major appliances such as an oven and a toilet.
With a fixed budget, and that budget broken down into percentages by room, you can then start to pull out numbers for big ticket items (furniture, for example) and assess what’s possible with what’s left. Part of the trick of budgeting, of course, is sticking with it. Working from most to least important and from most to least expensive will help you hold strong.
5. Get More for Less
Finding quality furnishings for budget prices is easier than you might think. Often, we end up spending more because we’ve got something specific in mind — a television with a certain feature or a couch that matches our prized throw pillows.
When we can remain flexible, the deals are only a few clicks away.
One rich vein of savings can be found by investigating closeout deals. Many large retailers have special sites that feature items they’re looking to offload at a fraction of normal costs. You can find excellent deals on furniture, electronics, and appliances at places like Amazon Warehouse, Macy’s Closeout, and Bed Bath & Beyond’s Saving Center to name a few. You can also visit a CORT Clearance Center for premium furniture at discounted prices.
How good are the savings? One quick scan turned up a modern, attractive bed frame for $100 off, a complete comforter set for $50, a simple, suitable coffee table for just $30, and a 40” 1080p flatscreen TV with Roku built in for $220. Now can you imagine furnishing an entire apartment for $2,200?
Depending on your particular situation, it may also be reasonable to buy used items — as long as they’re in good repair. Remember, only your very first tenant will get them fresh out of the box. Each subsequent tenant, even if you bought new, is going to experience used goods anyway. That’s part of what makes an apartment homey — the lived in look! Check out Chairish or AptDeco for stylish used furniture and decor.
6. Show Off Your First Rental
Once you’ve finished furnishing your first rental, you might be tempted to go after tenants right away. Before you put it on the market, though, be sure to invest in your listing page. Spend the remainder of your furnishings budget on decorative items such as lamps, rugs, and art. Then, give your first rental a good clean and take high-quality photos before anything gets busted.
Photos, more than just about anything else, will convince a prospective tenant to become a paying tenant. Wait for the sun to be shining, get rid of any clutter, clean the windows, and use flash on your camera. Expect to spend a few hours taking pictures and making sure you have the perfect shots. It may seem like a pain, but this is the point where you’re converting all of your investment in furnishings into advertising potential.
7. “Mi Casa Es Tu Casa”
We’ve got one last piece of advice when it comes to renting your first rental: take care!
Tenants can tell whether or not a landlord cares. That sense greatly influences how they experience their stay — and then how they pass along that experience as reviews on sites such as HomeSuite.
To maximize your investment in furnishings, give your tenants a warm welcome. Make sure everything still works and looks presentable before each new tenant checks in. That may mean further investment in maintenance, but it shouldn’t mean plopping down chunks of cash on renovations. Remember: a chair with a wobbly leg can drive a tenant nuts, but the lack of new granite countertops won’t ever come as an unwelcome surprise.
In short, we suggest — for financial and human reasons — treating your tenants with respect as guests. They’ve entrusted their comfort to you and you should be worthy of that trust. Make sure they’ve got hot water for showers, comfortable pillows on the bed, and a working Wi-Fi network. They’ll appreciate all the hard work you do, especially if this is your first rental.
That appreciation is called customer satisfaction, and it’s a direct route to increased rental income.
Want to learn more? Check out https://www.yourhomesuite.com/landlords or tweet @yourhomesuite and we’ll get right back to you!