With the Vancouver Olympics less than a year away, Dave and I started wondering if we should rent out our home in Burnaby to some Olympic visitors. As we started considering that as an option, it suddenly occurred to us that we didn’t have to wait until the Olympics to do short term furnished rentals. In fact, it might be a good idea to do a test run before we turned our home into a furnished rental for the Olympics.
Since neither of us have to be in an office everyday, and we don’t really HAVE to live where we are right now, we thought we’d just throw an ad on Craigslist offering our place as a short term furnished rental and see what happens.
At first… nothing did happen. But after 3 or 4 days I received an email from a woman whose home had sold in 3 days (when they were expecting it to take several months). They weren’t going to be moving for another 5 months! She desperately needed a home for her and her family for the short term! We took an application, just like we would when we rent out any property, and checked their credit and their references.
I admit – knowing they’d be sitting on my couch in my living room, I was extra cautious. We checked EVERY reference we were given, and every little detail. Everything looked great … and 20 days later we were packing up our personal belongings, putting them into storage and heading over to Salt Spring Island where my parents have a gorgeous oceanfront Bed and Breakfast.
We spent the next four months doing a bit of traveling, but mostly enjoying ourselves on Salt Spring Island. It was really liberating not having a bunch of stuff and not really having a home.
When we moved back in, the place was in pretty good shape, and the transition back was so easy because everything but our clothes and office materials were already there!
Doing a furnished rental is definitely not the same as a regular rental property transaction though.
The general principals of attracting and screening good tenants are the same, but there’s definitely some things you should know if you’re interested in turning your home into a furnished rental or buying a property to become a furnished rental:
- Furnished rental properties command a higher rental rate but they cost you more too … from what I’ve seen online the fully furnished rentals will go for 25% – 50% higher than market rent. That is a big advantage in a market like Vancouver where it’s very difficult to make a place cashflow with regular rent rates. BUT – furnished rentals have a lot more costs. Besides just the cost of furnishing the property (which you probably can expect to spend $10,000 doing), you are responsible for paying all the utilities, telephone, cable, internet, and if applicable security. Many rentals also come with regular cleaning services which is another expense. We charged 24% more than market rent for our property, but we pretty much broke even because of the added expenses. Of course, we used their rent to pay our mortgage for four months so that was nice! 🙂
- Fully furnished means that someone only needs to arrive with their suitcase. You are providing everything someone would need to live in your home like:
- dishes, cutlery and cookware,
- appliances like blenders, coffee makers, food processors,
- towels and bed linens,
- cleaning supplies like brooms, vacuums, and shovels (if applicable),
- amenities like television complete with cable and wireless internet are pretty standard. Basically if a hotel suite would have it, you should too!
- Expect a variety of needs. The family that ended up living in our home brought in their own bunk beds for their kids, but they may have wanted these provided. There are places where you can rent furniture and you’d just have to find one nearby that provides the pieces you require. This could include a crib or high chair or additional desks for people who work at home.
- It’s Not Your Home (Anymore). Once the new tenants move in, remember it’s not your home. If you were living there remove anything personal. The new occupants don’t really want to see the painting of your family on the wall, nor will you want anything to happen to your prized possessions. If you will be devastated if something is broken or damaged do not leave it in the home. And remember to expect some natural wear and tear! When we moved back in certain things weren’t in the same condition or they weren’t functioning like they were when we left. It’s too be expected, and if it wasn’t our home I don’t think it would have bothered us but because it is our home, it bothered us a little bit. We just couldn’t understand why they didn’t take a screwdriver to tighten this, or why they didn’t just go to the hardware store to buy a new washer for that. But, just because you’d do that to take care of your own home doesn’t mean they will!
- Create a detailed checklist of what is in the property for the tenant walkthrough! Go from room to room, ensuring you note the details like how many forks, saucers and plates you’re leaving behind. Record the number of towels, the big pieces of furniture and the paintings. If something is broken or stolen you will need a record of what was there in order to use their deposit to buy a replacement. You’ll want your tenant to sign off on this when they move in, and then you’ll want to do a detailed inventory of everything when they move out. This is big pain, and I admit I didn’t count the forks when I moved back in … but I did note a missing glass … which brings me to the next point …
- If you’re creating a furnished rental, buy extra boxes of the breakable items. We now have 7 drinking glasses… thankfully we bought them at Ikea and not only are they cheap but we can replace the missing glass easily. Had we purchased a box of glasses on sale at Sears we would now be short a glass. So, if you are setting up a house to become a furnished rental buy an extra box of plates, an extra box of mugs and cups. If it can break easily, be prepared to replace it easily!! You want to have matching sets … and this will ensure you always do!
One successful rental does not make us furnished rental experts … but we wanted to share these lessons learned with you in case you’re considering turning your home into a furnished rental for the Vancouver Olympics or in case you think it’s a great way to make a property cash flow in the Greater Vancouver Area.