Hi All..
Does anyone have any experience with renting out a Fully-Furnished IP?
We will be renting our latest IP as a Fully-Furnished IP, this will include the WhiteGoods basics such as
*Dishwasher
*Microwave
*Fridge
*TV
*Washing Machine
*DryerBut will also include things such as linen, furniture , cuttlery (pots, pans, plates, knives, forks) etc etc
In short it will be set up for the tenat to walk in with their clothes and thats about it..
What we need to know is what value to set on the rental (It would rent for $250-260p/wk unfurnished)..
we have secured a long term tenant that wants this supplied and we can use some older furnishings we own (I guess we will have to establish a nominal value?)
We will also purchase some new furnishings for the property..
This will alll help with cash flow..but…
Has anyone else done this and how do you establish a value on the older items as well as set a market rent???
Any help or tips would be appreciated..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Redwing
My understanding is 80-100 extra for fully furnished over general market unfurnished rent.
cheers
SGLife should NOT be a journey to the grave with the intention of arriving safely in an attractive and well preserved body, but rather to skid in sideways Beer in one hand – Pizza in the other, body thoroughly used up, totally worn out, and screaming WOO HOO!”
I have a fully furnished 2 bed unit that is renting for $220 per week (but without the linen and cutlery) The other units in the block are rented out for around $170 per week unfurnished. This is also targeted to long term tennants.
Hope this helps
Sorry, I did not read all of your questions.
As far as establishing a market value for the furniture, I took photos of them and paid a nominal fee for a second hand furniture dealer to give me an estimate for the value for replacement and depreciation purposes.
And to establish a value to add to the unfurnished expected rental return; I thought 25% was a reasonable return on the value of the furniture.
I also created my own condition report for the furniture and have the property manager check it before and after each occupancy in addition to the standard condition report they use.
I would suggest you request 6-8 weeks rent as a bond as further insurance against any damage to your furniture.
Hi Redwing,
I’ve got a 2 bedroom unit which I went through the process of fully furnishing. Initially it was unfurnished and was renting for 220/wk about 2 yrs ago. Since I had it furnished I went through an awkward holiday letting phase, but eventually put it back on the permanent letting market about six months ago.
The agent said that 300/wk was the value which I found hard to believe, I would have been happy with 260-280/wk. But lo and behold, 300/wk it was and a flood of applicants on day one, so the fully furnished excercise has definetely worked out for me.
Bear in mind though that the rental market in that area has lifted since 2 yrs ago, and present unfurnished rental value of my unit would probably be around 240-250/wk now, so realistically for me it’s about a 50-60/wk difference.
You should check with agents in the area your unit is in as to demand etc anyway.
Also, don’t put old junk furniture in, put decent stuff in as nobody is going to pay top dollar to live in old furniture etc. And make the tennants provide their own linen.
Sorry that I ramble on a bit, but I hope this helps. Good luck!If you haven’t had a depreciation schedule done for the IP, you can have the valuation included as part of that.
Try and buy furnishings that allows them to all fall in the LOW VALUE POOL for higher depreciation.
I generally would not supply linen only the bed spread to match the other decore in the room.Don’t forger, wall hangings (painting, mirrors etc), wall units to make the place feel like a home.
Don’t forget to up the contents insurance, to replacement value of the furnishings.Mal
Getting out of your comfort zone, can help you become comfortable
INtersting, we’ve only ever had one fully furnished IP and we found it attracted a lot of short term tenants as it was so easy for them to just get up and move whenever they felt like it. A lot harder if they have to move furniture too.
I did note you stated you had a long term tenant set up so hope all goes well.
Regards
PKHi Redwing,
We rent out our 3 bedroom beach shack as fully furnished.
Everything is provided except the linen…not good cleaning up after other people’s “activities”…strongly advise not to go down that path.
The furniture is literally a dumping ground of our ‘seconds’, but unlike the city, people have a lower expectation when they go there. We have all brand spanking new white goods…good depreciation and cuts down on the whinging factor.
If you can secure a long termer in there, and charge them above market rates – I think you may be onto a winner there.
[blink][blink]Now you’ve put me off my breakfast Dazzling..
We’re looking at the same kind of thing regarding some of our older furniture, which is still in good condition.
How did you go about establishing a nominal value for these items including crockery, kettles, utensils etc?
White goods will be easier to establish the value on, plus we’ll buy new kettle, toaster etc..
Beds, cupboards etc we will get prices on secondhand items (I like aphex’s idea of taking photo’s of the items..handy for insurance as well and I’m sure for a small fee a secondhand dealer will give me a price list on the items..)
I’ll begin constructing an excel spreadsheet for the items and establishing values.
I’ve had a look at several sites in WA such as
http://www.fhsa.com.au
http://www.radio-rentals.com.au
http://www.rentalsrus.com.auPretty expensive stuff if you ever decide to rent furniture..with this in mind, it may be an option to rent other IP’s with whitegoods or offer an option to buy; This could increase cash flow[upsidedown]on some properties….ALL our IP’s at this stage have single females or mothers in them, having Security Systems etc in the properties has attracted and kept them IMHO.
Thanks for the Tip’s [thumbsupanim] If you can think of anything else, feel free to post.
REDWING“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorShould have someone from http://www.depreciator.com.au at the property within a few days..the excel list is nearly organised and I’m ctaching up with a guy who runs a 7 day a week 2nd hand store to get some prices..
All is looking good so far, pity we cant post photo’s on this forum.. :o(
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorJust as a matter of interest, you may want to check out this site – pomsinperth.com
They are involved in short term accommodation, mainly northern coastal strip – $500-$600 fully furnished rentals.Also, I would contact RE agents who deal with this market (F/F holiday homes), Dunsborough, Busselton etc. they have specific packages for owners which outline requirements etc., this may be a helpful guide.
We have friends who rent a holiday home in summer period, and I was under the impression that furniture etc. needs to be quality standard to achieve high rental returns??
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