Posted April 10, 2023 | by Keaton Bessey, Managing Broker
We constantly receive inquiries from prospective Landlord clients about renting their property as a furnished rental. When we ask them why they want to rent it furnished, we get the following responses:
- The furniture is already here
- It rents for more
- I don't know what I would do with the furniture
- I have really nice furniture
- I thought there was demand for it
- There will be less damage on move out
It's all really just about not wanting to move, store, or sell the furniture at the end of the day.
While the reasons above are all completely logical, what these prospective Landlord clients fail to understand is how this decision will affect them going forward. Below I will explain the 4 key reasons why nearly all of these clients decide to rent unfurnished after a quick discussion:
1. It rents for more because it costs you more as the Landlord
Renting a property furnished has the following additional costs and increased costs above and beyond renting unfurnished because of increased turnover and required services to the Tenant:
- Furniture damage
- Appliances, plateware, breakage, etc.
- Move in/out fees
2. All the items in number 1 cost way more than selling off or storing your furniture
Many of the Landlords who reach out have a 1 or 2 bedroom apartment with minimal furnishings. To ensure the unit is completely empty and rent ready for a long term unfurnished Tenancy, they would need to consider the following work / costs to prepare the unit:
- Store (on going or in the storage locker of the condo, or at least most of it)
- Sell (if they wanted to)
What they also do not understand is that the list above can all be hired out. You can either do all of this yourself, take care of some of it, or pay a company to do it all. We work with many small local businesses who can assist you with this work if you find yourself in this situation. Send us an email to request to be connected: email@example.com
3. Offer your rental as furnished requires different furniture and other professionals to help which negates all the reasons to keep your furniture
Generally, unless you're an interior decorator who works with rental companies, you're likely not going to have the furniture and other items best suited for a rental property. It's also likely that you over purchased and you should consider less expensive and more functional furniture for the space. You should consider the following:
- Furniture designed and priced for furnished rentals
- Hiring an Interior decorator--sourcing furniture, artwork, etc.
The increase in turnovers will require more questions, inquiries about changing furniture, disinterest, etc. unless its done by a professional. Also, in this case, you would have to get rid of your furniture anyway, so at this point most people would like decide to rent unfurnished.
4. "But my friend rents theirs furnished long term and its working out great." does not factor in the risk
Thats awesome and we're very happy for your friend. It can also work out the same for you.
We find that Tenants who sign a 12 month lease for a furnished apartment way more frequently break the lease during the term for the following reasons:
- They were looking for a short term place and could not find one but didn't want to say anything
- They figured they knew the laws, they reached out to break it, and its okay (for them)
- They were not sure how long they would stay
- They had not established themselves in the area yet and that happened faster than they expected
This causes the following problems for you
- Additional marketing
- You've rented at a long term rental rate for only a short term tenant (double lose for you)
As a small Landlord (likely first time or only had a couple Tenant's worth of experience) there are already a bunch of risks you are concerned about with the strict tenancy laws in BC, fear of non-payment, damage, etc. and this adds an additional layer of variables and risk.
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