Tips for Owners
Let’s take a look at some top tips which will ensure that your furnished property meets the standards of tenants who are often willing to pay a premium rent for the convenience of a furnished rental.
1. Simplicity Is Key
Providing furniture for your tenants means that you will have to cater to a wide range of possible tastes. The secret is in the simple, modern elegance in which a property is pulled together. That is not to say that you should pick lifeless, sterile, minimalist furniture designs; however, steering clear of items with 1) overly elaborate decorative features, 2) oddball shapes, or 3) overstuffed, oversized furniture will help you appeal to a wider audience and end up as easier assets to clean and maintain in the years to come.
When choosing furniture, it is important to establish a coherent design concept which can be carried from room to room. For inspiration, why not book a night in a premier hotel which is run by a large chain: such organizations will typically hire the best interior designers to create a classic combinations of furnishings and lighting which will appeal to the widest possible demographic. If you can unlock their secrets and apply thoughtful design touches to your property, you will be far more likely to get tenants lining up to move in than you would by choosing furniture at random.
2. Well Stocked Kitchen
As a landlord, it is important to provide a kitchen that is stocked with items that a tenant will need during their stay. One of the main reasons tenants choose to rent a furnished rental rather than a hotel room is the convenience of a kitchen. One of the major complaints a guest has about staying in a hotel every night is having to eat out at every meal. Not only does it cost more money, guests often complain they gain weight as a result. Buying cheap pots and pans made of scratch-able Teflon is one of the biggest mistakes we see people make. Often they will need to be replaced after each guest which costs much more money over time. Rather, buy a quality set of pots and pans such as All-Clad Stainless that will stand the test of time and tenant use. It is important to provide the tenant with enough silverware, dishes, cups, bowls for a few meals so they don’t have to do the dishes every day. If your property sleeps 4 people consider providing 3 sets of items for each guest, so 12 cups, 12 small plates, 12 large plates, you get the idea. This will prevent any aggravation caused by minimal supplies and will cut down on your water and energy bill if a tenant can avoid using the dishwasher frequently.
3. Comfortable Bedrooms
We can’t stress enough the importance of providing comfortable mattresses. We’re not saying you have to buy the most expensive mattresses, but choosing something in the mid-range will pay off for you in the long run. If your master bedroom is large enough, we’d highly recommend investing in a king size bed. People ask about bed sizes when they are comparing furnished rentals and it’s often difficult to convince someone who has been sleeping on a king mattress at home to “downgrade” to a queen. If you can’t fit a king then a queen is acceptable.
We recommend steering clear of full size or double mattresses. They are simply too small for 2 adults and you will lose business. And whatever you do please don’t forget the mattress protector. There is nothing worse than a stained mattress so do yourself a favor and protect your mattresses. Your tenants will thank you!
4. Keeping Up with Technology
Providing up to date technology will appeal to almost any tenant and often result in a tenant coming back again in the future. We prefer Samsung or Sony brand, flat-panel televisions. Providing a cable TV service that offers 70-80 channels is always going to pay dividends. Consider providing a DVD player or blu-ray player, or better yet a Netflix account! With so many iPhones and iPads out there, we’d also recommend purchasing a Bluetooth speaker or docking station that allows a tenant to charge their device and listen to Pandora at the same time. For $75 you can provide a “bonus” many tenants were not expecting and will enjoy. For a number of our higher end properties we provide Apple Desktop computers as a “wow” factor.
Some Other Helpful Tips
1. Please make sure your rental is clean. Cabinets and drawers should be free of crumbs, bedding should match, be stain-free, and towels should be fresh and stain-free. Cleanliness is the biggest complaint from tenants.
2. Provide a washer/dryer in the property for tenant use.
3. Use white sheets and towels that can be bleached, if needed.
4. Consider having tenants purchase security deposit insurance that will cover any damages and replace stained items.
5. Provide basic cleaning supplies for tenants to use. Remember, if you provide a vacuum, tenants will actually use it and help keep your property clean.
6. Consider putting an electronic keypad on your front door so keys aren’t needed. You’ll cut down on tenants calling you in the middle of the night when they lock themselves out.
7. Consider placing beveled edge glass on wooden top surfaces to avoid wear and tear.
8. Make sure your rental has a place for tenants to store clothes. A dresser or closet with adequate shelving is necessary.
9. If you furnish your rental property with quality items that are comfortable and long lasting you and your tenants will be happy for years to come. Remember, your rental success is directly related to the quality of items you place in the property. Tenants who can move into your property with only a suitcase and find the property clean, modern, and classic will come back again.
What Mistakes Should I Avoid Making as a Landlord?
Landlord Mistake 1: Over-Leveraged, Under-Capitalized
Borrowing as much money as possible when buying or refinancing rental properties may seem like a great idea, but it is all too easy to leverage yourself out of your monthly cash flow. This means you will be in the red as soon as you have a vacancy, or unexpected property repairs, or unpaid rent, or a lawsuit, or a bed bug infestation occurs, or any of the limitless landlord problems that arise. By keeping predictable monthly costs low, and a healthy cash cushion on hand for unexpected expenses, landlords will profit most months and will be prepared for the lean months. At the end of the year, you should show a profit if you keep your predictable monthly expenses (mortgage, taxes, and insurance) at no more than 50% of your month rent.
Landlord Mistake 2: Using a Generic Rental Agreement
Using a generic rental agreement can leave landlords open to lawsuits, unenforceable leases and worse. Many states have special language that must be included within the rental agreement, or state-specific disclosures that must be attached to the lease, and there are even federal lead paint pamphlets that often must be included. Additionally, states place limits on how much a landlord may charge for security deposits, how many days late the rent must be before a late fee can be charged, and countless other restrictions that landlords must know. We suggest either hiring a landlord-tenant attorney or an experienced property management company.
Landlord Mistake 3: Failing to Properly Screen Tenants
When it comes to locating tenants, there can be a lot of bad apples out there that know how to take advantage of the system. People tend to be fundamentally responsible or fundamentally irresponsible with money; in the mortgage industry they say "an applicant's income tells whether they can pay, but their credit history shows whether they will pay." Remember to verify employment, income, credit history, criminal background, and obtain current and past rental history. You will need all this information later if you end up in court.
Landlord Mistake 4: Ignoring your Rental Properties
The roof is leaking, the washer is not working, and there are ants in my apartment… Easy to procrastinate, but harder to ignore long term. Addressing tenant concerns and potential problems with your rental properties quickly and effectively will save you financially, and may prevent any possible lawsuits. Send a handyman you trust out to the property to take a look, and more often than not, the tenant was merely overreacting, but you still have to check.
Landlord Mistake 5: Failing to Serve Tenant Violations
While your heartstrings will tug, falling behind on rent is not an option. Patience may be a virtue but real estate investing is a business, and needs to be run like clockwork in order to succeed. Serve the tenants quickly when their rent is not paid, and it will send a strong message.
Follow these steps, and you'll find that your rental business runs smoothly and profitably, with unexpected costs minimized.