Furnishing a rental property doesn't have to be expensive, and you can usually charge higher rent for it, so should you just go for it?
The only easy answer to this is, if your business plan is for short-term rentals (STRs), specifically vacation rentals, then Yes. If you're planning to list the home on Airbnb or VRBO, then there's really no question you have to furnish it.
If it's going to be a six-month lease or longer, then the decision needs more thought. Yes, for some people it'll be a plus, but not for all. Consider the pros and cons, both for potential renters and for you.
Pros of furnishing your rental
- You can charge an average of 30% more per month for it.
- Certain renters are specifically looking for furnished, so you will have a competitive edge with this customer segment.
- It makes a space look more finished without necessarily costing a lot.
- With nice furniture, you can target the business travel segment, who often have a work budget to cover corporate apartment rates.
- You can avoid getting rid of items or putting them into storage.
Cons of furnishing your rental
- Risk of damages to furnishings.
- Certainty of wear and tear -- more so as the house gets closer to fully furnished/decorated.
- While big items like beds and couches are typically sturdy, smaller ones like kitchen appliances and accent pieces are more likely to be moved around, improperly cleaned, or otherwise carelessly handled.
- Strong likelihood of small items (linens, kitchen tools, TV remote) getting broken or stolen.
- It can be hard to get compensated for any of the above -- many renters will deny responsibility.
- If renters don't want furnishings or don't like what's in your unit, they may decide against renting based on that alone.
- If it's a long-term lease, they may ask you to remove the furniture and lower the rental rate while you wind up eating cost of transport/storage and only getting unfurnished market rate for the rental.
- More upkeep/cleaning is required. If you are offering a fully furnished rental, people will expect it to be in turnkey condition -- including bedding and fully outfitted kitchen. This requires housekeeping service and full inventory after every checkout, in addition to regular cleaning.
Tips for furnishing your rental
Don't bring in anything with emotional or high actual value. At the same time, stay away from the least expensive items. They break more often and give the entire place a cheap look.
Rule of thumb: Find items that lend the perception of value but aren't necessarily expensive.
Take a full inventory when you're done moving in the furniture, and consider making a copy of that list available to your renters -- both so they know you're paying attention and so there's no confusion when they pack up to leave.
If it's a vacation rental, make sure renters know the automatic costs of replacing certain things should they "go missing" during a stay. It may not protect you completely but will make people more cautious than if there appeared to be no oversight.
Make sure your unit is priced competitively for the market -- if you're not getting any bookings at 30% higher than unfurnished, drop the rent to 20% higher. Be realistic about what you're offering and who is most likely to be your customer.
Should you furnish your rental?
As stated in the beginning, the first thing to determine is whether you plan to put this home on the STR market. If so, furnishing it has to be part of the plan. If not, then it comes down to potential additional profit, increased potential appeal to a target customer segment, and whether you have furniture on hand.
If you're not sure it's a great idea, think about other amenities to attract guests -- like fast Wi-Fi, an outdoor grilling/dining area, or a parking space. As a landlord, there's more than one way to increase your rental's appeal -- and commensurately, its rent.