If you’ve been actively thinking of investing in furnished short term rentals, there are a couple of regularities that must be given priority.
Table of Contents
- What Are Short Term Furnished Rentals?
- How to Get Started
- The Pros and Cons
- Tips for Running Furnished Short Term Rentals
- Final Thoughts
So far, investing in short term rentals has proven to be an effective way for the host to earn more than a generous profit. Since the situation with the pandemic seems to be stabilizing, that gives investors a chance to get back to making money with these types of investments.
With proper research and a well-developed strategy, investing in furnished short term rentals could provide you with a rewarding income.
However, the investment process requires a lot of pre-work—including locating a property, covering some upfront costs, advertising, and many more.
So it’s vital to equip yourself with knowledge and financial resources before taking on such an investment.
To better understand how to start this process the right way, realize your investment plan, and why you should embark on this investment journey, keep scrolling.
What Are Short Term Furnished Rentals?
Let’s start this guide by focusing on a brief explanation of this type of rental and discuss how they came to be and why their popularity is rising again.
First and foremost, as far as the rental itself—the name says it all. A fully furnished property (in this case, a short term rental) is a property with all its “goods” installed.
That primarily refers to the so-called “white goods,” as in appliances and gadgets.
Your tenants can expect to have access to washing and drying machines, freezers, stoves, vacuum cleaners, cutlery, and other appliances and gadgets.
The rental should also be equipped with an entire set of furniture, the same as what you have in your own home or apartment. Basically, we are talking about sofas, beds, cabinets, tables, chairs, and so on.
In short, fully furnished short term rentals provide a tenant with everything and don’t require any additional baggage that they would otherwise have to carry with them.
On that note, here are some key requirements for furnished short term rentals that should be met:
- Living room: Sofa, table, lamp, coffee table, bookshelf
- Kitchen: Cutlery, dishes, glassware, pots and pans, cooker, freezer, fridge
- Bedroom: Bed, nightstand with a lamp, wardrobe, desk
- Dining area: Table and chairs
- Bathroom: Shower, shower curtain, wastebasket, toilet, floor mat, mirror
Curious about how short term rentals came to be?
Here’s the deal:
The first vacation rental was actually advertised back in 1995, and it was on a platform that hosts continue to use to this day—Vrbo. The idea was to create an informal platform where hosts and tourists could connect.
The aim was to provide tenants with pleasant, cheaper lodging options with a more homely atmosphere than a typical hotel accommodation.
Short Term Rentals Furnished vs. Unfurnished: The Difference
Okay, we’ve outlined the requirements for a fully-furnished property that is up for rent. Now, let’s focus for a second on the difference between a furnished property and a property that has nothing in it.
The latter is referred to as “unfurnished property,” and yes, these types of properties exist.
Unfurnished properties are aimed at tenants who are picky with their furniture and typically have the time (and means) to equip the property they’re staying in with their own essentials.
That said, those who plan to spend their time in unfurnished apartments are probably aiming at long-term leases. It would not make sense to move around all their things and furniture for a shorter period, as is the case with short term fully furnished rentals.
Unfurnished rentals tend to be popular with people who are currently in between houses, so to speak. They’ve sold their house, packed their stuff—and are waiting to move into another. Renting out an unfurnished property makes more sense in their case.
Related: How to Find Short Term Rentals for Sale
Are Short Term Furnished Apartment Rentals Popular Again?
They definitely are.
As we mentioned at the outset of this article, as the whole pandemic situation begins to calm down, people are taking any opportunity they’ve got to travel and stay in places they’ve always considered their “dream vacation spots.”
So, a furnished short term rental acts as a getaway ticket, where tenants don’t have to worry about any extra luggage—at least not in terms of furnishing and amenities.
All that is expected of them is to show up and enjoy their stay.
It’s a definite plus if they come across pet friendly furnished short term rentals. Such rentals include additional necessary equipment for pets.
Related: Should You Allow Pets in Your Real Estate Investment Property?
How to Get Started
Now that you are familiar with what furnished short term rentals are—and why they’re popular—chances are, you’re already wondering how to get started on this investment opportunity.
Find a Profitable Location
Naturally, the first step to realizing an investment strategy is finding a profitable location—an area where you can expect high occupancy rates.
Here, it’s important to consider seasonality, weather, amenities, attractive locations for tourists, local events, and so on.
Usually, it takes time to pin down the location that will match your investment strategy. You can rely on online tools, like Mashvisor’s Property Finder, to give you a helping hand with that.
Equip Your Property
Since we’re talking about furnished rentals, it’s crucial to equip your property with everything your tenants need. Of course, that will depend on your budget and how financially stable you are—but some basics should be covered, nonetheless.
Speaking of furnished short term rental, you will need to approach this with great care and equip every corner of the room well. Don’t go overboard with furniture to reduce the risk of paying for damage; instead, keep things simple and limited to the necessities.
Determine Pricing and Invest in Security
It can be said that these two things—pricing and security—go hand in hand when it comes to renting out furnished short term rentals.
The first thing you must do when furnishing your apartment is to calculate and decide on a price that will reflect the quality and services you provide.
Here, it’s imperative not to go below the average and lower the price so much that you won’t get a decent return on the money you’ve invested in the property. But at the same time, you don’t want to go overboard with your pricing, either.
On a related note, it’s every bit as important to invest in security. Since there will be valuable gadgets and appliances in the apartment, you want to be sure that they will stay there—even if no one is on the property.
Security cameras and standard alarms are a must with furnished rentals.
The takeaway here is that you must be realistic about your capabilities and the needs of your target tenants.
Advertise It Properly
Once you’ve equipped your short-term rental with the necessary furniture and appliances, it’s time to advertise it online and (hopefully) attract future tenants.
“A picture’s worth a thousand words,” as the saying goes.
So, with furnished properties, you want everything you’ve invested in to be showcased in the photos. We would recommend that you pay a professional photographer for that. They know how to do this job properly and show your rental property in the best possible light.
If you don’t have a clue where you should advertise your rental property, here are a couple of recommendations:
The Pros and Cons
With all that covered, let’s get into the advantages—and disadvantages—that typically come with furnished short term rental properties.
The first major advantage that comes with renting out a furnished short term property is that you can generally require a higher security deposit from tenants.
That is somewhat natural and expected; your property has the additional “equipment” that is found in any other house and, as such, offers more opportunities.
Of course, you shouldn’t go overboard with the deposit. That would only put off your tenants. It’s crucial that you do market research first and then set your price accordingly.
The next advantage has to do with events in the city where you’ve decided to invest in furnished short term rentals—which, again, is why location is so important. Here’s the thing:
If your property is located in a city where interesting festivals and events that attract tourists take place several times a year, you can expect greater interest (and higher income) during those times.
Another good thing about such rentals is that they are not age-specific. If you put effort into furnishing places for rent and creating the right atmosphere, you can expect guests of all ages to be interested in them.
One considerable downside of these kinds of home rentals is dealing with the maintenance costs.
And for beginners, this may sometimes seem like you are giving more than you get in return.
That’s understandable. However, you need to keep this property in good condition and make it presentable and functional for your tenants.
So, while at first, it might seem like more money is coming out of your pocket than entering it, don’t worry:
As you build your reputation, you’ll be able to raise your rental rates for your property over time and expect generous profits.
Another thing that may worry a few future hosts is the occupancy throughout the year—but that’s the thing with all short term rentals:
They can bring in generous profits during a particular period, for example, summer vacation, but then the interest drops drastically during the winter.
So, if you’re considering house rentals, don’t limit yourself to just vacation homes. That way, you can still expect a profit throughout the year—and not just during one season.
Tips for Running Furnished Short Term Rentals
If you’ve decided that you wish to rent an apartment that is fully furnished, here are some tips to help you meet—and maintain—a standard on the real estate market.
Be Clear About the Rules
Since we are talking about fully equipped short term rentals, there are a lot of valuable things you may have on the property, all of which should hopefully remain functional for a long time.
So, it’s important to be clear about your “house rules” and what they can and cannot do while staying at your rental.
Even though tenants should follow common sense and decency, you should keep in mind that they’re vacationers in your community. So, you should still mention some things.
So, for example, if there’s something you want them to keep in mind—like keeping the noise down or having up to a certain number of visitors over—don’t forget to mention it before they set foot on the property.
Learn More: The Complete Guide to Setting Your Airbnb House Rules
Pick Your Tenants Carefully
With these rentals, you generally wouldn’t want to accept just about every guest interested in your property. Why is that?
Well, for one, you’ve set up a fully equipped and functioning property. You likely can’t afford to change appliances that break down often or pay extra to cover repair costs.
Provide Good Customer Service
As with any other rooms for rent, you must provide tenants with great customer service.
It is in your best interest as an investor—and a host—to consider the feedback you get from your tenants and, more importantly, act upon it.
That could concern anything from the way you arranged the furniture on the property and the functionality of the appliances and gadgets to the atmosphere of the property itself—and much more.
With house rentals, a good review—and a happy guest who will choose your property again—is a huge advantage over your competition.
That’s a wrap on developing an investment strategy that includes renting out furnished short term rentals.
Now, let’s just go over the main facts again:
When it comes to short-term rentals, it is imperative to distinguish between furnished and unfurnished property. Both are very popular; however, the furnished property nevertheless allows tenants to just check-in and enjoy their stay without carrying additional luggage.
To start things off successfully, you need a lot of knowledge about the real estate market in general and, most importantly, reliable estimates. For that—and for some help with finding the right investment property—Mashvisor tools are at your disposal.
For example, to be sure of the profitability, you can turn to our Rental Property Calculator.
Engaging in this investment strategy carries advantages and disadvantages. While you can expect higher profits, you should be aware of the possible damage and pay special attention to security.
In short, it’s essential to find the most profitable location, equip your rental property with the necessary appliances and furniture, and find the right way to advertise it online.
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