Oakland advice -- furnished lower rent?

Question

Is anyone crushing it in 30+-day furnished professional listings (e.g., travel nurses) especially in the Bay Area, who could give me some advice? Or has anyone seen furnished places go for less than unfurnished before?

I recently furnished a 3 BR. This is a high cost of living area, and in the neighborhood right now, I see a 3 BR of worse finish quality listed for $3k and a 4 BR that's about equal for $3900, both unfurnished with long term leases. (There are also fancy lofts for much more per bedroom.)

I just heard from someone who is looking at my furnished listing that they'd like to pay $950/bedroom and think that's justified based on the other places they're seeing. I really appreciate this kind of feedback and am likely to cut a deal with them to get it rented. But, it is a bummer because I just spent $$$ on furniture, bedding, and all of the many incidentals. Also, I've added about $250 to my monthly costs to cover utilities.

Looking on Furnished Finder, I do see plenty of places in my approximate price range, so I thought my target (average of $1100/room) was competitive and reasonable. Looking on AirBnB, $1150 for a tiny place was the absolute cheapest comp I could find nearby, and the next was around $1250/month (after Air BnB fees). But looking on Craigslist, I am now actually seeing a couple of small and non-fancy furnished rooms for $950.

In the near term, I'm happy to cut a deal just to get it rented for a couple months. But as I think about my long term plans, between the higher vacancy rate, the added monthly expenses, and all of the correspondence with potential renters, I'm strongly considering UN-furnishing it and going back to a long term rental. Has anyone else run into anything equivalent?

Thanks! I *thought* I'd done my market research, but I clearly have more to learn!

Carolyn Fuller · Answer

I ran into this situation in Cambridge, MA when the pandemic hit. I rent by the semester to visiting scholars during the academic terms and by the night to vacationers between academic terms. Both visiting scholars and vacationers disappeared in 2020 and there was a glut of furnished listings. Fully furnished apartments were showing up for less monthly rent than long term unfurnished places. By fall of 2021, both the visiting scholars and the vacationers were back in town, a lot of furnished listings had disappeared and I am back to renting at my pre-pandemic rates.

Visiting scholars don't blink at the rents I charge. Visiting nurses choked on rates that were 20% less! That said, I'd not trust prices I see on Craigslist. It is renowned for fraudulent listings. If it is too low to be true, it is most likely not true.

Since my leases are fixed short term leases with no option to extend with visiting scholars, I'm able to start advertising as much as 9 months before there is a vacancy and get a signed lease with last month's rent paid in advance. That is so not the case with the visiting nurses we targeted in 2020. They seem to not know their schedule more than a few weeks before their contract begins. If you are trying to find an immediate tenant, you might want to lower your rent for a fixed short term and start advertising for a future higher priced rental and target an audience who know their schedule that far in advance and are willing to pay top dollar. If you are near a university, check out SabbaticalHomes or see if the universities have listings targeted toward their visiting scholars.

Bruce Woodruff · Answer

Are you looking to do a true STR? Meaning short term rental......weekends, a week or two....? Sounds like you're thinking about monthly rental from your post. This is a whole different ballgame, now you're dealing with 'tenants'.....with all the rights that California gives them.

Can you do shorter term rentals where you are? It should get you significantly more income....

Bora Moon · Answer

I'm wondering what you ended up doing! It seems travel nurses demand has dried out, and now I'm at the cross roads between long term rental and mid term.

Ricky Tran · Answer

Did you end up running a mid term rental for travel nurses in Oakland? I'm currently exploring that through Airbnb arbitrage but I'm not sure if the numbers are stellar given how high rents in Oakland are compared to how much I could charge travel nurses

Carrie K. · Answer

Thanks for all that advice, Carolyn! I might try that.

Bruce Woodruff · Answer

^^^This

Carrie K. · Answer

Thanks, Bruce. I hear what you're saying. It'll pencil out either way, I'm just trying to be smart about navigating the different housing sub-markets and especially this pivot to the furnished market. Is anyone else seeing furnished rooms going for less than unfurnished?

Bruce Woodruff · Answer

@Carrie K. So maybe consider getting a property outside of Oakland? And although it may be very nice of you to want to help traveling nurses, that may be a misguided model for your business. Do you want to make money or be the nice guy?

Only my opinions of course, but I would find a locale where they are not unfriendly to landlords and find the best deal you can that makes you the most $$ with the least stress.

Carrie K. · Answer

There must be a 30-day minimum in Oakland, I believe -- Oakland isn't big on STRs.

I actually got into this after reading about how tough nursing is these days and the rise of travel nursing and the need for housing for them. I thought maybe I could play a role by making a nice, comfortable place to live. So I'm okay not making the big bucks STR style, but I also don't want to do it at a monthly loss. (And of course, I don't rent just to nurses, as discriminating on the basis of income source would be illegal and not cool. It was just an inspiration as I was setting the place up.)

Thanks!

Oakland advice -- furnished lower rent?

Oakland advice -- furnished lower rent?

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