Apartment investing, how much are you willing to put into it?
If you are an apartment investor, choosing the route of furnished or unfurnished apartments is critical. You have to select what will maximize your income and protect the overall investment in your building. This is not an easy choice, so here are a few pros and cons.
Of course, the easy thing to do when you invest in an apartment building is to rent the units unfurnished. For most, this is good stead income with no worries of furniture or wear and tear on items you purchased. Some tenants have liked to settle into rentals for years; all you have to do is provide the occasional maintenance tasks and fix minor plumbing issues, broken windows, and items like that. Some tenants prefer shorter rental terms, which means you have to refresh the apartment with paint and other maintenance to keep the units looking fresh for the next tenant.
Overall, we are far fewer things to consider when renting unfurnished apartments than furnished ones; the leasing term and maintenance are the primary considerations. The property location, style, and upkeep of your building will determine the type of renters you attract, which is essential in deciding whether you should rent furnished or unfurnished apartments.
With a short-term tenant, a month-to-month lease in a furnished apartment is often beautiful. For example, military service people are usually stationed for short terms and don’t like having to haul furniture from duty station to duty station. Also, consider traveling business people and nurses working on short-term assignments. These are perfect tenants for furnished apartments, and these great tenants cause minimal damage because their companies often lease the apartments for them. Hence, they have extra inventiveness to be gracious tenants.
Some municipalities allow you to split apartments into separate rooms to create shared units. Apartments with shared common areas have huge profit potential. A furnished room is very convenient for renters who want to travel light or maximize their income by sharing expenses with others. Since many people travel on assignment and have other homes, they mainly care about working and having a safe place to sleep at night. We don’t want to assume all short-term renters seeking furnished apartments are the drifter types.
Tenants that rent furnished apartments are usually willing to pay more for apartments because they are getting more. Secondly, most will already have a complete furniture set elsewhere and don’t want to move or place their items in storage. Since they’re utilizing your furnishings, they accept the responsibility to care for them and pay a security deposit to cover any damages. Overall, as the landlord, they have a higher class of tenants.
The decision to rent furnished or unfurnished apartments dramatically impacts the type of tenants you can attract. Furnished rentals are the way to go if you prefer to attract higher-priced tenants looking for shorter-term leases. If you prefer long-term renters who like to nest for a year or more, then an empty, clean, well-maintained apartment is the right choice. Ultimately, the decision should be based on the most profitable situation for you, the investor.