Rent Furnished or Unfurnished?

Question

I am an out of state landlord and have a rehabbed one bedroom condo in a historic building in downtown Indianapolis.  Since I bought it in 2006, I have rented it as a furnished unit to corporate execs.  My medical resident recently up and left saying his student loan payments just ballooned and he could no longer afford the rent.  Now I need to decide if I continue to rent furnished or store the furniture and rent unfurnished for $200 less/month.

The apartment supply has increased and I have more competition.  Also more students are moving into the area with less money to spend on housing.  My condo has not appreciated and I need to perk it up with new accessories and small furniture if I continue to rent furnished.

Does anybody have good experience with executive short term rental housing and whether the payoff with a furnished unit is better than unfurnished?  Thank you for sharing your experiences!

John Fleming · Answer

I think it just really depends on your location and the market you are after. I rent to medical residents, and they are after furnished. The place is less than a half mile from the hospital where they work, and as residents they are really just sleeping there a few hours a night, then going back to work. I try to make the whole process as easy for them as possible... and have had great success thus far.

Dru Doyle · Answer

Thank you for sharing your experience.  Was hoping to find higher quality tenants and less wear and tear on the unit but I am experiencing no such thing.  So thanks to you all, I've decided to not go overboard on the furnishings and list it both ways.  It seems like I have to provide the same level of cleaning and repair no matter whether it is a furnished or unfurnished tenant.

Tim Booz · Answer

In my experience there's a drastically larger pool of tenants looking for unfurnished rentals. Furnished saves a bit of hassle in regard to getting the place emptied out, but I've found it takes longer to find a quality tenant.

Another issue I've seen is that often times furnished renters are shorter leases, while unfurnished apartments are typically 1 year leases.

Shawn Holsapple · Answer

@Ryan Mullin beat me to it!  I would suggest trying AirBNB as well.

Otherwise, offer it as both furnished/unfurnished and see which one gets more response.

You can always furnish quickly if you have a tenant that wants like that.

Ryan Mullin · Answer

Generally speaking unfurnished is in much higher demand.  However, it all depends on the unit and price points.  Could be an AirBnB play as well.

Depending on a lot of things I may have an interested party.

I'd love to talk!