Investor · NJ · Member since 2021 · 15 posts · 7 votes
Looking to add a rental to my portfolio but am coming to the realization I may need to furnish the new rental due to the market not having a lot of turnkey properties at this time. Is it possible to add the furnishing of the home into the home loan ?
Why do you need to finance furniture? I've set up more places than I have fingers and toes. It shouldn't cost more than $1500. That's 4 appliances and all the furniture.
To Paul's point, it takes me about $30k to furnish a new place... so its a significant effort if you do large, 4000 sqft 6 bedroom places with all new modern furniture. You can't furnish a place with your traditional loan. Maybe a commercial or private lender would let you do that.
I try to stick with 1-2 bedroom, 1 bath units and I furnish with new stuff, but not necessarily high end. Lots of IKEA!
It is usually about $3000-5000, depending on size. That includes everything from silverware to linens to tables and chairs and tvs.
Oh yeah, you can't roll that into a traditional residential mortgage loan. You'd need private money.
I use the same exact model! It also almost eliminates the chance of someone throwing a party because it is not enough room. Guest typically rent 1-2 bedroom apartments for a particular purpose. i.e. School,Work,Medical.
Looking to add a rental to my portfolio but am coming to the realization I may need to furnish the new rental due to the market not having a lot of turnkey properties at this time. Is it possible to add the furnishing of the home into the home loan ?
Furniture stores are always giving away crazy free interest rates and stuff like that. Don't think you can put it into your mortgage nor should you try to.
From my research you cannot finance furniture into the loan. We just furnished our first STR and my best advice is goodwill, re-store or architectural salvage companies. We saved so much money on the small items! Most end tables are like $40 each. We got some for $4 and they where the style we wanted. Some antique stores work too for artwork, old art prints and maps. We had a lot of fun with it and saved a lot on our initial budget. You can always buy more furnishings next year after you start earning some cash flow.
We furnished our 2bed apartment buying all of our furniture from Rooms 2 Go. 66 month 0% interest. We often get compliments on how nice the furniture is and comfortable the beds are.
Looking to add a rental to my portfolio but am coming to the realization I may need to furnish the new rental due to the market not having a lot of turnkey properties at this time. Is it possible to add the furnishing of the home into the home loan ?
So everyone does it differently I have personally financed my furnishing into my rehab loans. So I dont have to come out of pocket for those items in the long run. I got a great gal who completely furnishes STR's for you. Depending on the project sometimes she flys out to the location herself and does it. Let me know if there is anything else I can help with. Contact me via message
@Eric Kelly there are lots of places that offer promotional credit cards with low or no interest for 12 months. I would look at IKEA, Amazon, Ashley Home Store, Target, Home Depot.
I have a pretty good list of items I have used in my rentals. Shoot me a PM with your email and I’ll forward on my recommendations.
I would never buy anything new for a STR. Well, except appliances. Not only because of the cost. We just furnished a 4BR 2BA for $2000. Everything from CL, FB Marketplace, Yard sales, high end antique stores, good quality thrift stores.
The benefits - good quality furniture, not modern crap..... Unique, one-of-a-kind items, artwork and knicknacks especially. I can't see spending any more than this. I just stayed in a nice STR in Scottsdale and it was so sterile, worse than a hotel room. Super clean but absolutely zero warmth or personality.....
Most property loans will not allow you to finance personal property in the loan. This is why purchase contracts list personal property separately and attach a separate dollar amount. Sometimes that amount is $1 just to satisfy the requirement that personal property is not part of the loan. Furnishings are not considered part of appraised or property value because they are portable and not attached to the property.
@Michael Porche mentioned financing furniture into the rehab loan. This is different than putting a property under contract with furnishing allowance. The bank is most likely appraising the value of the property high enough (minus furniture) that he is able to cover the cost of furnishings.
You have gotten a variety of responses on costs to furnish a STR. Be aware that there are many different quality levels offered in the short term rental world. How much you spend on furnishings should line up with your target audience. Are you low, mid or high range?
@Eric Kelly I have never seen a bank willing to add to the loan in order to furnish a place. The best option would be to ask them for a line of credit in order to furnish the place after closing.
Be aware that there are many different quality levels offered in the short term rental world. How much you spend on furnishings should line up with your target audience. Are you low, mid or high range?
They should also be aware that one can indeed furnish a high-end STR all from thrift and antique shops.
Hey Eric! If you're buying a new build, I've heard of scenarios where some of the furnishing can be baked into the loan, but it's a bit of a gray area that you need to act cautiously and work with the builder and your loan officer.