Turning Your Home into a Furnished Rental

Renting out a furnished property is not the same as renting out a regular, empty property. Although the rules for attracting and screening tenants don’t change, furnished properties come with their own sets of challenges and these need to be considered before you turn your home into a furnished rental property:

1. A rental property that comes furnished can get 25% to 50% more than an unfurnished property, which is a significant advantage in areas like Vancouver where you might have a difficult time making a profit each month from your rental property. However, even though your rent is higher, your costs for a furnished property are higher as well. It costs at least $10,000 to furnish the property, as well as the cost each month for all utilities (water, hydro, gas, phone, cable, Internet, security, etc.). Today’s furnished rentals also often come with cleaning services, which are paid for by the landlord.

2. A fully furnished property means someone only needs to bring themselves and a few personal items. You are providing everything else, such as:

– dishes, utensils and cookware,

– small appliances i.e. blenders, toasters, coffee makers and food processors,

– towels and bed linens,

– brooms, dust pans, vacuums and other cleaning supplies,

– cable television and wireless internet. A furnished property should be like a hotel with all the amenities.

3. Expect to have to rent some items you hadn’t thought of. Children’s furniture, like cribs and highchairs, may be needed for some tenants, while others may require special computer desks or filing cabinets because they work from home.

4. Remember, this is not where YOU live. Don’t leave anything personal in the house, especially prized possessions or paintings of your family that could possibly be damaged.

5. Prepare a detailed inventory list of everything in the rental unit and the condition that it was in before the tenant moves in. During the initial walk through with the tenant, go over this list together and have the tenant sign off to verify that they acknowledge that everything on that list belongs to the rental unit, and if anything is damaged or stolen it will need to be replaced using their security deposit. When the tenant moves out, you will want to use this inventory list again to see whether everything that was originally in the unit is still there and is in the same condition (more or less).

6. Buy extra boxes of breakable items. i.e. an extra box of plates, an extra box of mugs and glasses. If it can break easily, be prepared to replace it easily!! It’s a good idea to furnish your unit with items from stores that are inexpensive and will always have a large inventory of the same pattern i.e. Ikea, so that you can ensure that you will always have matching sets.

With the Vancouver Winter Olympics coming up, many people in the Greater Vancouver Area are considering turning their temporarily vacant homes or their unfurnished rental units into furnished rentals. If you are thinking of doing this, please keep in mind my lessons learned. Furnished rentals are a great way to make a property cash flow, but will mean some extra work (and extra expenses) before the unit is ready for rental.