Investor · Chicago, IL · Member since 2021 · 12 posts · 10 votes
Hi all! When you are putting your numbers together for a new STR property, how do you look at the cost of initial furnishings, linens, etc? Do you just look at this as an acquisition cost like you would a downpayment? Do you have a formula for how quick you'd want to recoup those start-up costs? I can easily see spending $15K to furnish and trying to figure out how to factor this into the profitability picture for the investment and what's realistic. Looking at the numbers, I def. wouldn't make it back yr 1 on cashflow after expenses. Thanks for any POV you want to share!
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
5y
Hey @Marissa Liesenfelt! That is a pretty good question. I think it is really going to depend on the area and the expected profitability of the place.
For us, we spend about 9k to furnish out our 2400sqft 4/3 lake house. Most of the furniture is USA made used off Craigslist, OfferUP and Facebook marketplace. Mattresses, linens, towels, kitchen stuff (for the most part) were all new.
Now I will say I am a deal finder and am still finding great stuff to furnish a house. A lot of stuff for free!
I know we made back that expense in the second year. The first year of any new rental (with some exceptions) is pretty lean. You are building a rep and need those 5 star reviews.
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
5y
Hey @Marissa Liesenfelt! That is a pretty good question. I think it is really going to depend on the area and the expected profitability of the place.
For us, we spend about 9k to furnish out our 2400sqft 4/3 lake house. Most of the furniture is USA made used off Craigslist, OfferUP and Facebook marketplace. Mattresses, linens, towels, kitchen stuff (for the most part) were all new.
Now I will say I am a deal finder and am still finding great stuff to furnish a house. A lot of stuff for free!
I know we made back that expense in the second year. The first year of any new rental (with some exceptions) is pretty lean. You are building a rep and need those 5 star reviews.
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
5y
I see this as a cost of doing business and essential to being able to rent a house for top dollar. I could see spending as much as 30k to set up a nice 3 bedroom house.
I started off with some used furniture to get going and replaced it with nicer new stuff a couple years later.
I could still make money with a 30k upgrade budget per year.
I took a different approach then most. I bought my STR in the Destin Florida area and live 1000 miles away. I spent three weeks there painting and light rehab. I didn't have enough time to look at used furniture. I was ok spending a higher amount to furnish it to save time. I wanted to wow people with the finishings. I spent 20K. I'll have it all back the first year. The response from guests has been outstanding. Most comment on how clean it is and love the way it is furnished.
I was fortunate that I hit the spring break crowd. The first 5 weeks were booked pretty quickly. Things are going better then expected. I calculated my numbers based on 50% occupancy. I’ll probably end up around 80%.
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
5y
You folks are nuts. I generally spend $9500 for a 3 bedroom house. Spend about another $1000 for repairs and another $1000 for furnishings and appliances. But I deal with refinery contractors.
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
5y
We got most of our stuff from Goodwill and other second hand stores. We already had several nice antique pieces though, which helped.....
Its actually amazing how much high quality stuff you can find in second hand stores if you're smart..... and patient. Including blankets and towels!
And neither of our STRs are low rent houses either, quite the contrary.....
OP, I wouldn't stress or over analyze this aspect...of course, plan and keep track (I used an Excel spreadsheet to budget this), but don't even start to obsess about this aspect of the business....it's a nothingburger....
Rental Property Investor · Denver, CO · Member since 2017 · 200 posts · 126 votes
5y
@Marissa Liesenfelt I look at this cost as a startup cost similar to renovations. On my spreadsheet I have a line item for renovations and a line item for furnishings, then a holding cost depending on how long the renovation and furnishing will take. I don’t worry that much about one time costs but I do factor it into my cash on cash returns.
My first STR I tried to save money by buying things used and realized my time was worth more than the savings, so for the last few units I have brought online I have found the best, easy to assemble hang for your buck furnishings. The time savings makes up for buying new in my opinion.
I have a pretty good list for the furnishings I have used and liked. Happy to pass on if you would like. Just send me a message with your email address. Good luck and have fun!
Investor · Chicago, IL · Member since 2021 · 12 posts · 10 votes
5y
Thanks so much for the POV, guys! Just got our offer accepted on our first property in Blue Ridge, GA! So now the repairs and furnishings begin. Appreciate you taking the time to respond.
Investor · Black Diamond, WA · Member since 2016 · 123 posts · 127 votes
5y
I am somewhat cursed because I’m a designer and I can’t bring myself to put cheap furniture or fixtures in my properties, I spend about $30k+ furnishing a two bedroom cabin.  Most of the furniture is custom built by the furniture company I own, but even though I’m buying it at cost it still ends up costing a lot of money. For example, I designed and built a custom daybed sectional from a live edge slab of oak, and it cost me $7,000 to build. However, it’s the focal point of the cabin and it helps us to stand apart.
My properties rent for about 400% more than anything else in our area so it’s worth it to me.
Thanks so much for the POV, guys! Just got our offer accepted on our first property in Blue Ridge, GA! So now the repairs and furnishings begin. Appreciate you taking the time to respond.
Awesome! I've been looking at that area, the Smokeys and beach towns. I've seen people spend as little as $10k of furnishing, but it depends on who you expect as clients. If you are going for an upscale/luxury feeling for large families (multiple parents), expect to spend a lot more $30-$50k depending on sqft, outdoor space, hut tub/pool, & bedrooms (3x king beds).
Rental Property Investor · DFW, TX · Member since 2013 · 953 posts · 910 votes
5y
@Marissa Liesenfelt with STR its all about getting it on the market and the reviews so we set a budget and deal find on FB and Craigslist but you need to make sure you're getting quality things too. But if you have to go over your budget a little to make things work together i wouldn't stress. Its all start up cost that will get depreciated