Today I would like to talk about Furnished Rentals.
I myself work with a lot of athletes and find myself constantly searching for high end furnished. As the years have gone on there seems to be less and less inventory for high end furnished options.
When I say high end most of these clients are looking for A) Luxury buildings (ie. St. Regis, The Ritz, Shangri La, Four Seasons etc.) or B) It can be in a regular building but the unit itself is outstanding (ie. completely high end renovations, PH units etc.)
It seems most people that own these types of units either live in them themselves or they have a enough money that they dont care to lease them out and its not worth the headache. Then there is the other side of the coin where many investors cant afford to have that level of purchase as an investment unit or they are worried that a unit in that price range will be difficult to rent.
The reality is they arent hard to rent at all and there isnt nearly enough of them. We have multiple professional sports franchises that require homes for 100’s of athletes when they come here to play, we have many high level executives and diplomats that come here to stay and Toronto is one of the top cities for shooting movies so all these high level actors need a place to live as well. All these categories of people want high end and they usually want furnished.
Now expect for high turnover, the most they will want is a year and the term could be as short as a few months. However the shorter the term the more you can charge. And of course with the unit being furnished there is a premium for that too.
The key thing with getting a premium for a furnished unit is the furnishing themselves. The nicer the furniture the more money you are going to get for it. If you plan on buying a million dollar unit and furnishing it with Grandma’s basement furniture then you arent going to get a premium at all. Dont be cheap make sure the furniture matches the unit.
Try to include as many services as possible, all the utilities, cleaning service etc. Also dont be stingy with little items, fans, plenty of glassware, cutlery, extra towels, linens etc. These people are willing to pay a premium for convenience. So the more you offer the more they will be willing to pay. They are looking for a hotel like experience.
One of the major advantages is these people rarely are home so they dont complain as much as a regular tenant. The requests are minimal, they arent going to try and screw you out of rent. They all have massive incomes as well. So you don’t have to worry about getting your rent on time. They are usually there to do a specific job or task so they’re not focused on harassing the landlord. They are also usually from other countries or provinces so they arent concerned with staying there long term so they view it as an interim space and dont stress about the little things like some tenants do.
Overall if you have the cash it is a great investment. You will get a much higher return on your money (more than a regular unfurnished unit) and with all the add on premiums you can charge and without as much of the headache as a regular rental situation these types of units are a no brainer. You might have to replace some of the furniture from time to time. However it will be a minimal expense in comparison to the massive rent premium you will be getting each month.
So go out there and buy some high end condos and furnish them! We sure do need more of them!