New to Real Estate · Metro-Detroit · Member since 2021 · 2 posts · 0 votes
I’m beginning the process of renting out my primary as part of my first investment! I’ve run the numbers and I'll cash flow around $200/mo, which I'm happy about for my first time! However, I’ve heard that furnishing a rental has the potential upside for higher rents. Has anyone had experience renting out their house fully furnished and if so, were you able to charge higher rent? Were there any other issues or upsides that come with a fully furnished home? Thank you!
For further context, my house is located in Oakland County, MI
It all depends on the location. Hop on furnished finder, apartments.com, airbnb, and zillow rentals to look at comps for furnished rentals. See if there are furnished rentals near you and what they are getting per month. You don't want to necessarily be the guy that proves the concept in your area. You'll typically get a premium of 30-70% on normal rents (depending on your market and location), but you don't want to spend several thousand dollars furnishing a place without having some comparable properties as a point of reference.
Another way of looking at it is, "who will your tenant be if you furnish the place?" - work backwards from that. Is it travel nurse, college student, digital nomad, seasonal worker at a local company, etc.? If you can't logically and quickly think who would rent your furnished unit, it may not be worth spending the money.
I'd happy to chat in more detail if you think that I can be a resource. Feel free to send me a message...I've got nothing to sell and we've been doing the mid term, furnished rental thing in one of our properties since 2020.
It all depends on the location. Hop on furnished finder, apartments.com, airbnb, and zillow rentals to look at comps for furnished rentals. See if there are furnished rentals near you and what they are getting per month. You don't want to necessarily be the guy that proves the concept in your area. You'll typically get a premium of 30-70% on normal rents (depending on your market and location), but you don't want to spend several thousand dollars furnishing a place without having some comparable properties as a point of reference.
Another way of looking at it is, "who will your tenant be if you furnish the place?" - work backwards from that. Is it travel nurse, college student, digital nomad, seasonal worker at a local company, etc.? If you can't logically and quickly think who would rent your furnished unit, it may not be worth spending the money.
I'd happy to chat in more detail if you think that I can be a resource. Feel free to send me a message...I've got nothing to sell and we've been doing the mid term, furnished rental thing in one of our properties since 2020.
You state that you have "run the numbers". What numbers? Long term rental, short term, or mid term? Check your competition for the type of property and rental term. As for long term, a furnished rental virtually guarantees you will be renting to someone that is NOT planning on staying for 3 or 4 years. This means you will have more turnover expense, more vacancy, and you also need to "maintain" the furnishings. Stained upholstery, water rings on tables, and otherwise damaged furniture needs to be addressed or you will miss out on the best quality prospects. Matching repairs and replacements can be problematic as well, with similar effect.
I rented a furnished single family home out here in Scottsdale to a group of college students for a couple of years and it was great. They paid $3,400 per month. My realtor told me if the home was unfurnished, it would have brought closer to $2,500 per month.
As everyone else stated above, it all depends on your location. Does your area have any high level trauma hospitals? Would your home be a good fit for a couple nurses or other medical professionals? Are you under 15-20 min from said hospitals. I recently heard hospitals with 350-400+ beds are a good indicator of medium term rental friendly city.
Other medium term needs include new people moving to the area from elsewhere that don't have their next house yet, new construction, other traveling business professionals. Does your location favor any other these? If so, furnishing it and renting out 30 days+ may be the way to go.
Speaking of furnishing, depending on your square footage, bed/bath count, etc. are you comfortable leaving most, if not all, of your furniture behind and will it suit a furnished rental well/photograph well? Or do you have the extra funds right now to take you furnishings with you and get new stuff in there? For our 2 bed, 1.5 bath units we rent short & medium term, it costs us about $10-12k in furnishings. Just something to keep in mind.
You can certainly make more rental income from short and medium term typically (depending on location like stated above and some other factors), but I will be honest, it's a ton more work whether you are self managing OR even hiring out. Even more of a business than long term rentals from my experience owning both.
If you want a set and forget investment - hire a property manager and make it a long term rental unit. If you want to become a hotel host on the job 24/7 begging for good reviews, yes you can make more money in a short term rental....but the cost to your time, and pride, may not be worth it. A short term rental unit is only a few bad reviews from being ruined and one bad piece of legislation being passed by the local government banning them. Review both options and decide what suits you the best.
Definitely unfurnished for LTR. While furnished LTRs do get a premium, they are much harder to rent, sit vacant longer, and likely turn over more often due to the more transient nature of the tenants looking for furnished rentals (many are remodeling their house, or maybe moved to a new city). It's also more of a pain to manage because you own all of the stuff, so naturally they expect you to repair/replace it (furniture, blender, toaster, tvs, etc etc)
I’m beginning the process of renting out my primary as part of my first investment! I’ve run the numbers and I'll cash flow around $200/mo, which I'm happy about for my first time! However, I’ve heard that furnishing a rental has the potential upside for higher rents. Has anyone had experience renting out their house fully furnished and if so, were you able to charge higher rent? Were there any other issues or upsides that come with a fully furnished home? Thank you!
For further context, my house is located in Oakland County, MI
Hey Collin. I've got a bungalow over there in Berkley that I have rented out Furnished LTR. At first I had the property on Airbnb and decided to transition to see if I could find someone interested in renting it long term. Found a great tenant using this strategy. I think the location of your property is really important. Ideally you'll want to be within a mile or two of a hospital, close to the interstates, and close to city amenities. I'd probably only consider this strategy in that area with a smaller home like 2 bed/1 bath. Anything larger, I would rent it out unfurnished long term.