Should You Rent Out a Furnished Property?

It used to be that the only way to rent a house was empty and unfurnished. Nowadays, more and more houses are available for rent fully furnished. However, renting a furnished house comes with it's own set of considerations. Of course, the ways you attract and screen a tenant are the same, but that's where the similarity ends. Some things to keep in mind when you're considering getting into furnished rentals are as follows:

1. On average, a furnished rental can be rented for 25 to 50% more than an unfurnished one. In a market such as Vancouver, where making positive income from rental properties can be a challenge, this can be a huge advantage. However, the cost of furnishing a rental (usually about $10,000) is just the start of the additional costs involved with a furnished rental. All of the monthly utilities such as water, hydro, gas, telephone, cable, internet and so on are your responsibility, not your tenant's. Security deposits also tend to be higher since there are more things in the unit that could end up being damaged. These days, regular cleaning services also come with many furnished rentals, which would also be paid for by the landlord.

2. A fully furnished property means someone only needs to bring themselves and a few personal items. You are providing everything else, such as:

- dishes, utensils and cookware,

- small appliances i.e. blenders, toasters, coffee makers and food processors,

- towels and bed linens,

- brooms, dust pans, vacuums and other cleaning supplies,

- things that used to be considered luxury items (like cable TV and wireless Internet). Furnished property should be stocked as nicely as a hotel room.

3. Expect a variety of needs. This could include a crib or high chair or additional desks for people who work at home. There are places where you can rent furniture, so you would have to find one to rent the extra pieces your tenant would require.

4. Remember, this is not where YOU live. Don't leave anything personal in the house, especially prized possessions or paintings of your family that could possibly be damaged.

5. Prepare a detailed inventory list of everything in the rental unit and the condition that it was in before the tenant moves in. During the initial walk through with the tenant, go over this list together and have the tenant sign off to verify that they acknowledge that everything on that list belongs to the rental unit, and if anything is damaged or stolen it will need to be replaced using their security deposit. When the tenant moves out, you will want to use this inventory list again to see whether everything that was originally in the unit is still there and is in the same condition (more or less).

6. Buy extra boxes of breakable items. i.e. an extra box of plates, an extra box of mugs and glasses. If it can break easily, be prepared to replace it easily!! It's a good idea to furnish your unit with items from stores that are inexpensive and will always have a large inventory of the same pattern i.e. Ikea, so that you can ensure that you will always have matching sets.

With the Vancouver Winter Olympics coming up, many people in the Greater Vancouver Area are considering turning their temporarily vacant homes or their unfurnished rental units into furnished rentals. If you are thinking of doing this, please keep in mind my lessons learned. Furnished rentals are a great way to make a property cash flow, but will mean some extra work (and extra expenses) before the unit is ready for rental.

Article Source: http://articleshouse.info

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