Originally posted by @Benjamin Vail:
@Account Closed good post! There are a few other strategies for lowering start up costs that you did not mention.
RENTAL FURNITURE!
I mean if your business already does rental arbitrage with landlords properties, why not do it with a big companies furniture also? My company runs 32 Units in Airbnb. Some of the houses we started them off by renting an entire house of furniture for about $300/month. We did buy dishes and towels ($500), but rented most everything else. Our profit went from $1500/month down to $1200/month on most of the units we rent furniture at, but so much less $$ up front, so that the ROI is WAY better!
Then over a period of the next couple months, if the unit is doing well, we start to buy pieces that will go well in that house. After about 3 months, we pick a couple days, and block the calendar. We call the rental company to come and return the rental furniture, and fill it will purchased item.
You can get much better stuff at better deals when you spread out the purchasing period over 3 months. Also, you can just save your profits from the first couple months, and use that cash for the furniture.
We like to get some guest feedback from each house, and use that information to determine a theme, and inform the design process as we further develop the space. If we get a lot of negative feedback, then maybe we would consider not further developing that peticular space, and just ride out the current lease before moving on.
That was a free one, but just one of the many strategies we use in our STR business. Good Luck!
Great thread here - appreciate all the advice from seasoned investors! So something I've been thinking about - if you acquire (buy or rent) a property that's far from where you live, how would you prefer to furnish it so that you can STR it? 2 options I can think of - trying to figure out which is cheaper:
Option 1) Contact a local furniture store & have them furnish it for me. Downside: paying full retail value, they’ll also have to deliver & set it up. Will be quick & easy but quite expensive
Option 2) Hire someone locally to furnish the place for me. Like a college student who’s majoring in design or something. Someone resourceful who’s used to working with a small budget. Have them find me deeply discounted used furniture, free items, estate sale items, etc etc - the way Jason was talking about.
I’m sure this person could furnish it super cheap but I’d have to pay them like $20/hr to go around finding me stuff which will add up pretty quickly as well! (Also I’d have to ask them for sample designs & thoroughly vet their design skills & their vision for designing my house, but that goes without saying)
Thoughts?
