Do You Think You Can Get More Money In The Long Run Renting it Furnished or Un-Furnished?
I guess it would be totally dependent on the deal. Obviously you would be buying replacements all the time if rents are below a sertain amount. The higher cost of rents would bring different tenants thus allowing you to use the furniture for several years or more. However that's not the rule just my opinion.
The biggest advantage to having a furnished property would be to rent it out per night or week as a vacation rental. If it's close to attractions, shopping, bars, casinos, lakes or anywhere people might want to spend the night then furnished is the only way to go. On one of the earlier podcasts a gentleman said he and his wife focus on that entirely and do quite well.
Furnished or unfurnished depends on your area and length of occupancy. Short term rentals that are furnished can command more rent if there is a demand but there is also more potential down time. In our area if you are furnished you can do winter student rentals and summer vacation rentals with the right house. If you rent year round monthly you are best off being unfurnished. The area mostly dictates the most profitable model and the neighborhood and house matters. However most areas don't have the same potential as ours does.
Looking at a furnished model keep in mind furniture costs money too. We have a company in our area you can rent furniture from and I have offered apartments furnished but never had anyone take us up on it. I have lived in furnished rentals along the way though mostly when we had short term housing needs. I would say there is no one right answer to your question but to me furnished and short term are tied together and can lead to higher rents if the market is there.
If you are talking about long term areas, unfurnished attracts a higher quality tenant IMO. Think about the stability of someone that doesn't even own furniture. There are exceptions, but most people who stay anywhere for any length of time own furniture.
if I buy the property and it is already furnished fairly nicely then I rent it out like it is otherwise I go unfurnished but I will typically supply appliances other than a washer and dryer unless there's already a working set there.
There is a market for furnished long term rentals albeit small. I work for a fortune 50 company in my W2 job and when I relocated years ago, a mentor told me to liquidate my belongings and rent furnished until I got to know my new market which would also maximize my relocation package to afford a heafty down payment on the new property once I knew the market and was ready to buy.... I didn't take his advice and man I wish I did in hindsight. So translation: if you own in any area that is corporate heavy and or has a higher educational institution furnished rentals could be quite lucrative. You can always test the theory with rental furniture for very reasonable costs without sacrificing the large cap-ex to buy only to find out you were wrong...
My properties are in Seattle within a 25 minute walk to downtown. This puts people within walking distance of various headquarters including Amazon.com, Nordstrom, Bill & Melinda Gates Foundation etc. Add in a few universities, three large hospitals, requisite law firms and there are loads of jobs close by. There is such a high volume of professionals moving to Seattle that we have done very well renting out furnished housing with flexible leases.
The combination of furnished housing + flexible leases allows us to charge higher than market rent. We'll stick with furnished housing until the market turns. I think that once the economy cools and less people are moving to Seattle then we may have to turn to unfurnished rentals with longer lease terms.
Others have pointed out it depends on your market.
I rented out an extra room in my house and it was furnished, for the sole purpose of getting tenants who weren't going to bring a lot of their crap into my house. The majority of the house was decorated to my tastes and I didn't want it changed to fit every new roommate/tenant.
My market was (past-tense now) students, summer interns, foreign students, fellows for non-profits, relocators, fresh out of college young professionals, and feds on temporary assignment. People who for the most part were moving with a suitcase, not a van and if they had stuff it was in storage or their permanent home elsewhere. Short-timers, which was fine with me as there were times I didn't want anyone else in the house with me. There aren't too many long term people who don't have their stuff following them in a moving van. But it depends on your location and if there are a lot of people who fly in for 1 or 2 years and fly back out.
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