Mid Term Rentals vs Furnished Housing

[Don Konipol]

For those who rent their residential properties mid term (30 days - 6 months), do you do so unfurnished, partially furnished (basic furniture but not towels, linens. dishes, etc, or fully furnished?  Do you offer the renter a choice?  
Also, do you give discounts for the longer the stay?

[Don Konipol]

Ok some really quality answers.  Thank you all. So, while my experience providing furnished housing is very limited, to one unit, I will provide my resulting analysis.  Take it for what it’s worth

Very high end high rise condo purchased in 2011 in Tempe, Arizona across the road from ASU for personal residence with purchase price of $500,000.  In 2014 I decided to move out of state and to lease the condo.  Market price for unfurnished rental was $2750 monthly; I was able to obtain rent of $4000 as furnished rental. Tenant was PhD student at ASU with wealthy dad who prepaid rent each year.  Tenant stayed 6 years!, rent had small increases in year 2 and 4.  
So, I received $1250 more per month furnished vs unfurnished.  Over 72 months that amounts to $90,000.  The furniture and furnishings cost me $37,000.  When the tenant moved out I was able to sell the furniture and furnishings on consignment and net $8,000.  So net cost $29,000.  Subtracting from $90,000 leaves net of $61,000 differential. Pretty good?

My monthly costs in operating the property was a average of $1000 monthly for HOA fees, gas, and water. Insurance was part of HOA. Property taxes were about $6,000 annually. Repairs and maintenance under $500 annually. So, on an annual basis total expenses were $18,500. Subtracted from the annual rent of $48,000 leaves annual net income of $29,500. As mentioned I paid $500,000 for the condo, add $29,000 net furniture cost, total $529,000. 5.6% annual cash flow return.

If I leased it unfurnished the rent would have been $2750 monthly, or $33,000 annually. Subtracting expenses of $18,500 leaves net of $14,500.  On purchase price of $500,000, return of 2.9%.

So, almost doubled my return by renting the property furnished.

As I side note I sold the condo for about 40% more than I paid in 2020 when the tenant completed her PhD and moved out.  

If you’ve had experience renting mid term or long term furnished let please share your experience whether you found it profitable, or not.