Greetings Everyone! I'm working on a 'side project' related to an STR investment calculator. After getting some great feedback, I realized I did not have FFE (Furniture, Fixtures and Equipment) built into the acquisition cost. I would like to use some type of base metric to start with using either # of bedrooms or square feet to estimate FFE costs for any given property.
I'm completely aware that each property is different and going to bring it's own FFE dynamic to the cost, but does anyone know of or have a good starting point to work from that might work based on # of bedrooms or total square feet?
Thank you in advance for any guidance you might be able to offer!
I have furnished 22 STR's with 82 beds. 95% of the furnishings I buy at estate auctions. A good rule of thumb is that a major appliance (fridge, stove, washer/dryer) can be bought for $125. A bed, frame, dresser and night stand should be under $200. A living room or dining room should not cost more than $200 to furnish. You'll also need sheets, utensils, towels, etc.
So there here is your formula:
FFE = [($500 + R x $200) x 1.10] x P
$500 is your 4 appliances.
R is your total rooms you are furnishing.
$200 is the cost per room.
1.10 is a 10% adjustment factor for purchasing small things.
P is a premium factor for items, e.g. luxury sheets, pillow top mattress, etc. P is between 1.0 and 1.5.
Thanks @Paul Sandhu ! I greatly appreciate your expert insight on this! I will definitely start with this format and like the idea of the 'premium factor' used to toggle the base rate depending on the situation!
Where I buy, in the mountains of Colorado (ski resort towns), properties are bought and sold already furnished. So there really aren't many acquisition costs for FFE.
However, I often want to upgrade to fit my style/brand. Things like kitchen appliances/dishes/flatware, brass light/plumbing fixtures, plain white switch plates, wall paint, etc. I generally figure about $500/bedroom for these things.
Obviously this is much more shoot from the hip than what Paul uses, but I guess that's because it's variable in my case, due to the fact that rental properties come ready to rent.
I therefore try to hit the ground running with a rental and then work on updates over the shoulder/mud seasons (May and October).
I guess my point is that your calculator sounds interesting, and looking to include FFE calculations is probably a good idea, but make sure it's optional for cases where it's not necessary.
Thanks @Garry C. ! Great insights! Feel free to reach out to me directly if you would like to chat more about the calculator.
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