Renting out a furnished apartment or home can be a good way to generate extra income. It can also help cover expenses if you plan to return one day. However, it may not be right for everyone. We spoke with Boyd Rudy, associate broker at Dwellings Michigan, to get his take on the pros and cons of furnished homes for rent (whether by owner or a rental company). He also gave us tips on preparing and listing your space for rent and deciding what to charge.
Should you offer a furnished rental vs. an empty one?
There are pros and cons to renting your home furnished vs. unfurnished, which can help you decide.
Pros of furnished
The biggest benefit of renting out a furnished apartment or home is that you can charge more. But before you start collecting rent, there are some downsides to consider.
Cons of furnished
Furnished rentals require some upkeep, and there’s more potential for damage. If a tenant breaks something, you must replace it, and there’s no guarantee you’ll be able to find the same item again. Plus, you may have to pay more for a replacement than the original.
Pros to unfurnished
Renting out an unfurnished home or apartment is easier because there are fewer upfront expenses. You also don’t need to keep an inventory. Tenants are responsible for bringing furnishings and décor when they move in and removing them when they move out.
Cons to unfurnished
The downside of renting an unfurnished home is that you can’t charge as much.
How much should you add to the rent for a furnished apartment?
The amount you can charge for a furnished rental vs. an empty one varies based on location. Comps can help you determine the fair market value of a furnished property, but they’re not always available. If you can’t find listings for furnished rentals in your area, Rudy recommends checking out prices for unfurnished properties. Then call a furniture rental company to find out the monthly cost to rent the furnishings. That’ll give you a baseline for what a furnished property is worth.
How do you rent a furnished apartment?
1. Consider listing with a realtor
Finding tenants for a rental property can be time-consuming. A real estate agent can help streamline the process by using their network to market the property, scheduling viewings, and conducting tenant interviews and background checks.
2. Use online resources
If you want to find renters yourself, try online resources like Zillow Rental Manager (you may need to pay a fee depending on the listing you choose) and Facebook Marketplace.
3. Reach out to corporate relocations
Reach out to corporate relocation companies in your area. Furnished apartments are popular options for temporary corporate housing.
Finding the right tenant is critical. Running credit and background checks and verifying references are typical during the application process. Learn more about renting out your home and creating a home inventory.