To Furnish or Not to Furnish?
The summer rental season is upon us, and you may be mulling over whether or not to furnish your Vancouver rental property. To help you make an informed decision, we have outlined some of the advantages and disadvantages of furnished and unfurnished rentals. We may not know what Shakespeare would do, but hopefully the information below can assist you in coming to the right conclusion.
To Furnish
As an obvious starting point, since you are now also renting furniture, decor, utilities, and the convenience of a turnkey home away from home, the primary benefit of a furnished apartment rental is that you’re able to charge more than you would to rent it unfurnished. For an investor, this can mean a higher return on investment (ROI), which is always a good thing, but must be properly evaluated and done correctly. As you’re undoubtedly aware, Vancouver is a destination city and furnished rentals are in high demand, especially during the summer months when you can increase your passive income even further by charging a seasonal rate for your furnished suite. Many investors are excited about the increase in vacation rentals during July and August, which brings with it more demand for rentals, more flexible move in / out dates, and the additional perk of spending a few days enjoying your own rental, or allowing friends and family to enjoy our beautiful city. However, the summer months usually fill up quickly and with a little planning and finesse, finding a tenant for a random vacancy can be accomplished. All together, furnished rentals can prove to be more profitable if managed effectively.
That being said, there are a few things you need to be aware of when renting a furnished suite. First off, there is a long list of items that need to be provided for your tenants, since they will be expecting a “hotel-ready” home away from home. You also need to keep your strata council happy, so be sure to make yourself aware of any rental term restrictions, such as monthly minimum terms on leases and move in / out fees that may apply (even if your suite is furnished and rented on a short term). Furnished or unfurnished, there are short and longer term leases available and with short term rentals you are more likely to have some vacancies in between tenancies. You may want to strive for a balance: optimize your ROI during the high season with shorter term rentals, but give yourself a break from all the move in / outs and aim for longer term rentals during the low season. Another point of note is that all utilities, cable, and internet are expected to be included. Some good advice here is to put a cap on utilities and restrict your cable TV and phone service to avoid unexpected charges that exceed your budget.
Not to Furnish
With all that being said, you may be thinking that renting your apartment for the long term sounds much easier. And you may be right. If you prefer to be more hands off and restrict your management time and move in / outs, an unfurnished apartment rental is probably a better option. It is standard to begin with a minimum 1-year lease for an unfurnished suite, and occasionally you may luck out with a long term tenant who will stay on after the initial lease for years at a time. However, in this instance rental increases are restricted by law and therefore you will have less flexibility with pricing and move in /out dates. There is a lot less to manage with an unfurnished suite and you are not required to provide those costly utilities such as cable, internet, and local phone. Your tenants will be more self-sufficient and you won’t have to invest as much time managing your rental unit. However, it is still important that you inspect your property at least once a year and that your tenant knows to report any deficiencies to you or your property manager. Problems are often much cheaper and easier to deal with when they first arise and a good property manager can be a huge asset in this regard.
Currently, the Vancouver rental market is highly competitive for both furnished and unfurnished rentals and being in touch with the market price for your suites is crucial to securing a good tenant. With almost 500 listings on www.rentitfurnished.com, our website is a great resource for pricing comparisons.
In the end, either option can be very profitable with effective property management in place. Whether you decide “to furnish or not to furnish,” Rent it Furnished Realty can provide you with both tenant placement and full Vancouver property management services. If you are interested in full property management for your furnished or unfurnished apartment rental, contact us at 604-628-3457 and we’ll be happy to discuss all of your needs. After all, even Shakespeare needed stagehands.