Examples of 'furnishing' on rental return?

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From: Dave


Hi everyone.

I'm interested in seeing examples here on furnished IP's. Specifically, from anyone who has:

1. Furnished their IP - what sort of rent were you getting compared to similar, unfurnished properties in the same area?

2. Rented out their property unfurnished, and then furnished it at a later stage - what sort of rental increase were you able to charge?

3. Furnished an IP and has experienced a horror story or two - would you be willing to share it with us?

Thanks in advance.

Cheers,

Dave


{Life's short...play hard}

 

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Reply: 1
From: Miakat .


I have furnished two large IP's now and couldn't be happier. The latest IP I bought was previously renting at $165 per week. With the property furnished, I get rent of $322 per week. Not a bad increase considering the furniture only cost approximately $1500. I have had no problems with the tenants as they look after it as if it were their own.

Miakat

 

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Examples of furnishing on rental return

Reply: 1.1
From: Matthew Campbell


Could you describe to us a little more about the demographics of your IP.
Just a few more details could give us some insight into what is possible.
Also, what furniture items did you get for $1500 because a lounge barely
costs that much

Regards

Matthew

 

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Examples of furnishing on rental return

Reply: 1.1.1
From: H T


Hi

I furnished an apartment in inner melbourne. Initially is was great, with $80 more pw (up from 250) for a $8000 outlay. But the negatives don't hit until you have it for a year or so. Those were
- the people who tend to rent furnished apartments are transitive people who often let your apartment for a minimal time. (max 3 months)
- the fixture and fittings seem to have more wear than normal unfurnished apartments because these people are often overseas/interstate travellers who often see it as a VERY temporary home
- the vacancy rates seem to be much higherr than when we had it unfurnished

To be honest im thinking I'll take the furniture out and sell it in the trading post and go back to unfurnished rentals.

just my experiences
HT

 

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Reply: 2
From: Scott Elsom


I rent unfurnished, but I always ask my tenants if they need any furniture. I try to rent it to them with a 9 month payback period (excluding depreciation). I have a list of items for rent that I give each new tenant. They always see something on the list that they 'need'.

Here are some examples:

Tenants weren't looking after the lawns. It turned out that they didn't own a lawn mower, so I suggested that they rent a lawn mower from me. Value of lawn mower..approx $250. rent $6 per week....124% pa. They now figure that they are paying for a lawn mower, they may as well mow the lawns...they look great now.

Townhouse advertised with white goods available. Tenant requested a washing machine, fridge, dishwasher and dryer. Cost of whitegoods....$1100. Rent $21 per week....99.3% pa

I buy small TVs from the trading post for $100 - $150 and rent them to Caravan Park tenants for $5 per week....return 170% to 260% pa. We have 41 sites and are renting 22 TVs out. That gives us an extra $5k income each year. We've only lost one TV...and their bond paid for that!

I figure that it is always worth asking if you can rent them anything else apart from the roof over their head....that's how to dramatically improve your cash flow with very little effort.

P.S. I am trying to work out how to oncharge cable internet, foxtel and/or 24hr security monitoring...so if anyone has any ideas...let me know.

Scott

 

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Reply: 2.1
From: Sergey Golovin


Scott, good on you mate.

It is like breath of fresh air.

In regards to cable it is dead simply - all you have to do is to ask Telco to install that cable for you (put underground or on poles). They will give you modem (integral part of the whole system).
When they do that ask if you can have multiple adapter for multiple points. Basically it is single entry (technical term – “In”) and dozen exits (“Out”). Only trick is, if it is to many outlets, you probably need an “amplifier” to boost that signal up bit, simply to have enough power for all those outlets. Anyway ask service provider about all those possibilities.

They might turn around and say "Ah! Business...We are going charge you..."

Well, let say it works out that they will charge you $2 per point day/week/month (?) connection.
It is OK. You charge your customers $4.

But do your figures first.

It could be actually cheaper to have let say 20 cables. Telco will put only one in place – they are not stupid, but they will give you let say 20 modems, one per house/van whatever.

Once again you have to find out the cost.

Good luck. Let us know outcome of that venture. I personally think it is great idea. I’ve been thinking about my self but did know how to do it.

Well done.


Serge.

 

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Examples of furnishing on rental return

Reply: 1.1.2
From: Miakat .


Matthew,

My properties are in a large city with a university within one train stop from my IPs. I rent the properties to students/young working people for 12 months at a time, hence negating the problems with short term tenants. I have enough demand that I don't need to take short term tenants.

The furniture I buy is good quality 2nd hand. You can find real bargains in the paper on a Saturday morning if you get up early.

I pick my tenants so that they look after the furniture. They are a little bit demanding about getting things fixed but I do not mind at all because they are looking after my places really well.

Miakat

 

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Reply: 2.2
From: Lisa Southgate


Scott,
hi! I loved your post. I would love to talk to you more for a story I'm doing on this topic. If you have no objections could you drop me a line? Thanks, hope to hear from you. Lisa.