Furnished or Unfurnished rental??

Question

About to close on our first deal. It's a 2 bedroom 2 bath 895 sq ft condo. We want to maximize occupancy. If we furnish the condo it would give us the option to Airbnb it between leases. What are cons to leasing a furnished condo?

Chris Mason · Answer

@AL Blanchard, go check out @Al Williamson's post history. :)

Account Closed · Answer

I did not deal with furnished units, but have known other landlords who did.  They said the main pain is that they will want you to remove certain items.  For instance, they want their own bed.  Then, you have to deal with removing furniture and storing it.

James Wise · Answer

A furnished unit is a huge hassle you don't want to deal with. Keep it simple.

Andrew Johnson · Answer

@AL Blanchard I have to admit, I have no idea what the Lafayette market is like, it's there's a constant demand for Airbnb, if there's usually a long time between leases, etc.  To fully furnish you'd have to look at how many Airbnb stays it would take to recoup those costs.  If you're in a good market I would imagine that you want to have it free (while it's not leased) for showings.  If you're trying to schedule showings around Airbnb visitors, cleaners, etc. it might be a little more challenging.  Not to mention, you never know when a condo board will decide they want to disallow Airbnb (or any vacation/short-term rentals).  If they do that you then have a sunk cost of furniture.  As others have mentioned, if the tenant already has furniture they're going to start to factor in the cost to rent a storage unit (if they like their furniture) during the duration of the lease.  If the tenant doesn't like the furniture you'll either be selling used furniture (a fun proposition) or hauling an renting a storage unit yourself.  Just some food for thought.

Michael Boyer · Answer

Lots of pros and cons covered already... I have done a similar variation on this strategy though (see below)

A few more ideas...

Cons:

• Tenants who already have plenty of furniture (and then some) may be turned off;

• Turn overs can be tougher with more items to clean, inspect, track, or move (work around) for painting, cleaning, etc.;
• Some up front costs to buy the furniture; some ongoing cost/effort to cover replacing it, accounting for it, etc...
• It is market dependent on whether this will even be in demand or pencil out (by increasing your rent or lowering you vacancy); in short, if you have a short term furnished rental demand or not...

Pros:

• Differentiated rental; there may not be many furnished condo rentals on the market, so if there is demand, you may have some pricing power. 
• You Airbnb idea may be a cash generator, but really (I mean really) check if it is okay with the condo board (rules, policies, bylaws, etc).... Some associations really frown on it.
• Good for some seasonal, corporate, and project workers (traveling nurses, oil and gas executives, highway project engineers, etc)...

One thing I did with a similar sized condo with some luck was the partially furnished strategy. That way, it did not turn off people who had their own items and also attracted those who did not want an empty unit. It was livable as it was (bed, table chairs, futon/couch) but not full or a turnkey ready place. That may or may not work on the Airbnb angle, though (and I never did Airbnb as  I found all my condos restrict very short term rentals and I prefer longer term tenants anyhow.)....

Best of luck

Evan Kilbourne · Answer

Pros: You can hit the short term rental market through AirBnB, VRBO, etc, as well as furnished executive stays, insurance relocations, etc.

Cons: Stuff breaks, gets dirty, higher turnover, more work if you let it be.

John P. · Answer

Sounds like a headache (and costly) to fully furnish it. I would choose your plan and stick with it.  Airbnb can be very labor intensive. Wouldn't be my choice but to each his own.

Furnished or Unfurnished rental??

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