Real Estate

Renting out a suite in our house - furnished or unfurnished?

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  • Dec 1st, 2020 1:44 am
[OP]
Member
Jan 3, 2008
388 posts
53 upvotes
Victoria

Renting out a suite in our house - furnished or unfurnished?

Hey sports fans, thanks for clicking.

We're planning to rent out a suite in our house soon, and I'm hoping to get some input on the furnished vs. unfurnished decision. Ideally we'd list the place for short term rental on Airbnb, but the city of Victoria doesn't allow it.

Goals: (1) Avoid long term tenants so we can set rental rates more freely and avoid rental freezes. (2) Get the greatest return possible.
Estimated Costs of Furnishing: ~$1,000 to furnish with half decent used furnishings from moving sales. Potential intermittent gaps in tenancy due to lower demand for furnished rentals.
Potential Benefits of Furnishing: Attracts more short -term tenants. Earns higher rents (possibly in the neighbourhood of $300/month extra).

The above has me leaning pretty heavily to renting it furnished, but I have some questions for anyone who has rented a furnished place before.

1. How does damage deposit work when it comes to damaged or missing furnishings at the end of a rental period?
2. Are there any rules of thumb when it comes to increased rental amounts to expect when renting a furnished place vs. unfurnished?
3. Any tips for interviewing potential tenants to to keep tenancies short?
4. Any tips for tenancy agreements to to keep tenancies short?
5. Any other notes/considerations/etc?

Thanks for your help!
9 replies
Deal Addict
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Apr 12, 2013
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Moon
In this environment no wants your furniture. Lets just assume you buy everything brand new, what do you do when your tenant moves out (since you want a short term tenant) do you buy new stuff for them or ???? To be safe just try unfurnished, if it doesnt rent then go with some furniture.
Koodo, Public Mobile, Lucky Mobile Customer
[OP]
Member
Jan 3, 2008
388 posts
53 upvotes
Victoria
kangarooz wrote: In this environment no wants your furniture. Lets just assume you buy everything brand new, what do you do when your tenant moves out (since you want a short term tenant) do you buy new stuff for them or ???? To be safe just try unfurnished, if it doesnt rent then go with some furniture.
Yeah that's a good point. Evidence has shown spread of COVID from surfaces is not the risk we once thought it was, but the messaging around that hasn't been effective. And as I stated earlier our goal would be to attract tenants with no long term intention of staying (and likely no furniture of their own). But perhaps in the midst of the pandemic those types of tenants aren't around as much, because things are being done remotely in a lot of sectors.

I guess we can try to really get a comfort level from the interview that the tenant isn't going to be around in the long haul.
Deal Addict
May 23, 2017
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Since you are willing to do both, why not offer the option? Put "may be rented furnished or unfurnished--$300/month extra for furnished" in the description. See what kind of tenants apply with each preference to get a sense of what works better for you. Obviously furnished will net you more money (if you are correct that it will fetch an extra $300, though tbh that seems high to me...I don't know your local market though), but it's possible you may get a higher quality tenant pool by advertising unfurnished. Or vice versa. Impossible to know without advertising both. Since you want to do short-term rentals though, this may only work if you have storage space to keep the furniture when you get a tenant who prefers unfurnished.

My gut feeling though is most short-term tenants will much prefer furnished.

Have you looked into BC's tenant laws? Is the suite completely separate or will the tenant share the kitchen etc? I know in Ontario this plan wouldn't work if they are not sharing common areas because tenants are protected by laws and can't be evicted after a short period. But perhaps BC has different rules surrounding this.

Also, I know your goal is to prevent rent freezes but do keep in mind it can be quite the hassle to constantly deal with tenant turnover every few months. Honestly I personally prefer long term tenants even if over time their rents drop a bit below market rate. The risk of getting a "nightmare tenant" also increases a lot if you are constantly bringing in new people (but again, perhaps BC is much more favourable to landlords dealing with problem tenants than Ontario).
[OP]
Member
Jan 3, 2008
388 posts
53 upvotes
Victoria
jk9088 wrote: Since you are willing to do both, why not offer the option? Put "may be rented furnished or unfurnished--$300/month extra for furnished" in the description. See what kind of tenants apply with each preference to get a sense of what works better for you. Obviously furnished will net you more money (if you are correct that it will fetch an extra $300, though tbh that seems high to me...I don't know your local market though), but it's possible you may get a higher quality tenant pool by advertising unfurnished. Or vice versa. Impossible to know without advertising both. Since you want to do short-term rentals though, this may only work if you have storage space to keep the furniture when you get a tenant who prefers unfurnished.

My gut feeling though is most short-term tenants will much prefer furnished.

Have you looked into BC's tenant laws? Is the suite completely separate or will the tenant share the kitchen etc? I know in Ontario this plan wouldn't work if they are not sharing common areas because tenants are protected by laws and can't be evicted after a short period. But perhaps BC has different rules surrounding this.

Also, I know your goal is to prevent rent freezes but do keep in mind it can be quite the hassle to constantly deal with tenant turnover every few months. Honestly I personally prefer long term tenants even if over time their rents drop a bit below market rate. The risk of getting a "nightmare tenant" also increases a lot if you are constantly bringing in new people (but again, perhaps BC is much more favourable to landlords dealing with problem tenants than Ontario).
All good points - thanks for your response.

Actually tenant rights might be stronger in BC than they are in Ontario. You're very limited in what you can do with a problem tenant. While it could be a problem and higher turnover could conceivably increase the risk of getting a bad tenant, I think it also dramatically increases the odds of getting tenants with short term plans. And there's no shared space.

We could try advertising both furnished and unfurnished, but we don't have the storage for furnishings and I don't want to invest in getting them if we're going to just end up renting unfurnished.

Perhaps the happy medium is to list it unfurnished, and also list it again with a furnished option, and wait to see which applicants we get for both, and quickly outfit the place if the best tenant at the best price ends up needing furniture. That approach limits our ability to affordably equip the place ahead of time, but that difference in cost is pretty negligible.
Deal Addict
May 23, 2017
1357 posts
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What I meant was don't bother to get furnishings now, but advertise that the unit has an option of being available furnished. Once you get applications in, see which tenant pool you prefer. Only furnish then if you like those applicants better.

If the suite is separate, in Ontario you can sign a short-term lease but the tenant has the right to stay longer if they want. Make sure you look into what's allowed in BC. (Advertising it as a short-term rental may help, but you're really leaving it up to the tenant to actually leave when they say they will.) If you don't mind them staying longer that's fine, but just keep in mind it may not be easy to evict them.
[OP]
Member
Jan 3, 2008
388 posts
53 upvotes
Victoria
jk9088 wrote: What I meant was don't bother to get furnishings now, but advertise that the unit has an option of being available furnished. Once you get applications in, see which tenant pool you prefer. Only furnish then if you like those applicants better.

If the suite is separate, in Ontario you can sign a short-term lease but the tenant has the right to stay longer if they want. Make sure you look into what's allowed in BC. (Advertising it as a short-term rental may help, but you're really leaving it up to the tenant to actually leave when they say they will.) If you don't mind them staying longer that's fine, but just keep in mind it may not be easy to evict them.
Yeah I gotcha - good plan. In BC you're actually not allowed to rent for less than a month at a time unless you're zoned a certain way and have a grandfathered arrangement with the city. They're super strict about it right now due to scarcity of rentals. I definitely know that regardless of furnished vs. unfurnished, we could end up stuck with a tenant for a long time. One of the hazards of landlord life I guess. Fingers crossed. At least with our approach hopefully that's less likely to happen.
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Oct 26, 2007
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YYZ
you could always rent with an option for furnished, and have the furniture professionally cleaned between tenants.
Licensed Full Service Realtor
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Apr 12, 2013
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Moon
bLuPhYrE wrote: you could always rent with an option for furnished, and have the furniture professionally cleaned between tenants.
This is very good advice too! You can do this and claim as an expense!
Koodo, Public Mobile, Lucky Mobile Customer
[OP]
Member
Jan 3, 2008
388 posts
53 upvotes
Victoria
bLuPhYrE wrote: you could always rent with an option for furnished, and have the furniture professionally cleaned between tenants.
I think that's exactly what we're going to do. List the place, and present the option for furnished vs. unfurnished. See what our response is like, and which candidates we prefer. Then go from there.

Thanks for the input!

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