Rentals are more desirable than ever, thanks to rising mortgage costs and financial uncertainty. As a landlord looking to attract quality Howard County renters, you may consider whether to rent furnished or not. The best way to decide what’s best for your rental is to examine the benefits and disadvantages. Read on as we discuss tips for renting furnished apartments, look at the best furniture options, and what to do to protect your investment.
What is a Furnished Apartment?
People have different expectations when it comes to furnished apartments. Generally speaking, a fully furnished apartment includes all items someone would need to live comfortably in the space. In other words, a tenant could move in without having to purchase anything other than perishable food items or personal items. Fully furnished units may include but are not limited to:
- Dining Room Table and Chairs
- Living Room Sofa
- Coffee Table
- Storage Shelving
- Bedframe and Mattress
- End Tables
- Dresser Storage
- Utensils, Dishes, Glassware, Pots, and Pans
What is a Semi-furnished Apartment?
Not every apartment that includes furnished will be fully-furnished. Semi-furnished is also an option for landlords and typically includes large pieces of furniture. These units may include the following:
- Living Room Sofa
- Dining Table and Chairs
Best Furniture Tips for a Furnished Rental Property
Durable and functional items work best in rentals of any kind. Places such as IKEA offer budget-friendly options in a wide range of functions. Keep in mind that these pieces of furniture will need to be replaced periodically to keep them looking fresh and appealing. The life expectancy of certain items in your Howard County investment property varies. Regular cleaning, maintenance, and inspections will ensure the value of your property over time.
3 Benefits of Furnishing Your Investment Property
- Price Difference: Many areas like Ellicott City see rent prices that are higher for furnished apartments. Tenants see this as a plus because they do not have to purchase furniture. Consequently, these tenants tend to look for more temporary housing and, therefore, a shorter lease. Short term leases less than 12 months can also drive up rent prices to help the landlord offset costs.
- Higher Security Deposit: If the apartment includes furniture of any kind, it will cost you money to replace it. Therefore, these added costs can be added to the security deposit to help protect your investment.
- Predictable Market: Places like Ellicott City attract young professionals, young families, and students from nearby Columbia and Baltimore. Furnished apartments in this area are appealing to tenants who have not yet built up their collection of items.
3 Disadvantages of Furnishing Your Investment Property
- Potential for Damage: The more items you provide to a renter, the higher risk for damages and added cost. Careful move in and move out inspections will assist landlords in distinguishing normal wear and tear versus tenant damage. Furniture does wear out over time, especially with high turnover. So, budget to replace items as they become shabby to maintain the appeal of your unit.
- Higher turnover: Tenants looking for fully furnished rentals also tend to be looking for short term housing. So, a higher turnover of less than every 12 to 24 months will add to your expenses as a landlord plus additional wear and tear. That said, rent is typically higher for both short term and furnished units, and that is one way to recoup some costs.
- Storage costs: Offering a unit fully furnished attracts some renters while putting off others. If a tenant wishes to rent the unit without furniture, landlords must arrange for storage of the unused items. Consider these potential costs carefully before deciding to offer a furnished unit.
How to Protect Your Furnished Rental Property
Since more items equal the risk of more damage to your investment property, added protection is vital. Landlords should layer their security to ensure they are minimizing financial risk. Consider these options below.
- Thorough Screening: Tenant screening is crucial to the success of any apartment rental but especially essential for short term furnished units. Landlords need to verify credit worthiness, criminal background, and rental history.
- Insurance: Check with your agent to see if and how much your landlord policy will cover in the event of furniture loss and damage. Additionally, landlords should require tenants to obtain renters insurance. Their plan will cover both their belongings and offer liability coverage against damage.
- Security Deposit: A standard security deposit is one to two months’ rent. If you rent a furnished apartment, the security deposit needs to be on the higher end to accommodate the added risk of furniture damage.
- Lease Addendums: Owners renting out furnished units require additional lease addendums. Include a detailed inventory of all included furniture and document the condition with photos or a video walkthrough.
Renting a furnished unit can be profitable but requires some additional work for landlords. Be sure to consider these tips for renting furnished apartments above to protect your investments. A Howard County property rental management company can help you find the right tenants for your Ellicott City investment property and assist with writing a lease to protect your investment and the additional furnishings within. Reach out to Bay Property Management Group Howard County to service all of your rental needs from leasing to maintenance.