What would a typical premium be for short term furnished rentals?

Question

Recently I connected with someone involved with corporate relocation and they had a decent pipeline of people who are looking for short term (3-4 month) rentals that are furnished in my area.

Does anyone have any experience with this niche?

The questions off the top of my head are what premium could a landlord charge for renting a home fully furnished vs unfurnished and also short term vs yearly?

Michael Boyer · Answer

There is probably a niche market there (and maybe a lucrative one for the right person and situation) but I quit doing seasonals in my area early in my landlording career.

In my area, 3-4 month rentals are in demand in some time frames during the year (summer tourism, legislative session e.g.), but having done a few short term rentals early on, it just did not pencil out well for me.

The majority of  your work as a small scale landlord is in the turnover and turnaround process (think re-prepping the unit, advertising, screening, onboarding the tenant, supervising move ins and move outs; then with short term rentals  multiply that by 3 or 4 per year per unit.....!) Also, it also seemed the seasonals move out at just the slow time, giving you a little vacancy, too... Perhaps one could systematize it, but I found the work on the turnaround similar if it was a 3 month or 3 year tenant (so I greatly prefer the 3 years one!).

So factor in all extra work in (value your time and energy) versus a long term, good paying tenant that may stay for years...Furnished, by the way, and I have done partially furnished is actually more work on the turn around as you have to move that stuff around to clean or paint, plus maintain/replace it, track it, etc...

Finally, as mentioned, you also now are in competition with more extended stay suite hotels and perhaps even people doing seasonal AirBnB type things...So you'd want to beat them on price and maybe differentiate, too (like sf home with yard, terms, etc)

Best of luck

Karen O. · Answer

Recently saw a post, can't remember where, from someone who had a furnished rental that they made available to a family that lost their home in a fire.  They were planning to repair their home and return to it so they were looking for a 6-12 mo temporary location.

I recall the poster said that the insurer agreed to pay twice the regular rent because...they would have had to pay for housing as well as furniture rental costs anyway.  So, to them it was a bargain.

Chris Z. · Answer

I would check Airbnb to get an idea on short term rental rates in your area. 10% is way too little of an upcharge. If rent for a 12 month lease is $1,000/mo, I would expect to pay $1,500 or more for furnished and having the flexibility of short term

JD Martin · Answer

It's really going to be area-specific. Furnished homes in my area are actually a negative, since nearly everyone has their own furniture and wants it gone. As for length of time, I add 10% to the rental rate for month-to-month lease carry-over tenants.

Juan Duque · Answer

Its not short term leases its a vacation rental, families going to the theme parks or business people that come to conventions, Orlando is a huge town for conventions since we have the second largest convention center in the US. Our short term rentals perform well in this market @Kris Lippi

Kris Lippi · Answer

@Juan Duque is that for vacation people who are going to Disney etc? How long are your short term leases?

Kris Lippi · Answer

Thanks for the responses. 10% does not make sense for this scenario. 50% over to double the standard rate would be great to work with to see if it the numbers would be favorable. Being able to get into rents being paid by either corporate relocation or insurance money seems like a great idea.

I checked Airbnb in my area and it was all rooms that could be rented, I didn't find any houses. In our area we have a lot of apartments that do furnished corporate housing. I could get an idea based on what they are charging. Overall, I think people would welcome an option for a single family home over an apartment.

What would a typical premium be for short term furnished rentals?

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