If you’re preparing to move out of your primary residence so that you can rent it out, one of the first questions you’ll be faced with is whether to rent it furnished or unfurnished. While there are a few considerations to take into account, the main question revolves around whether or not your home would be appealing as a short-term rental.
There are tons of tourist attractions in the San Diego area, and that means your home could be appealing as an Airbnb or a Vacation Rental by Owner (VRBO) type of rental. The main appeal of short-term rentals is that the income from them is good. If your rental property brings in $2,000 a month on a lease which is long-term, the very same rental might bring in $1,000 a week as a short-term property.
There are some drawbacks to consider with that scenario however. For one thing, you’ll probably have more wear and tear on the property, and the expenses will be higher for sure. You might also aggravate your neighbors, because you have tenants coming and going more frequently. Also in San Diego, there is a transit occupancy tax, and you’ll be obliged to obtain a business license.
You’ll find that property management can be a very expensive prospect, and more than likely you’ll end up paying between 20% and 25% to get good professional management. On the other hand, you could do it yourself but it will take an awful lot of time and effort. Before you decide whether your property is a good candidate for short-term rental, crunch all the numbers and see if it makes good sense to you. Keep in mind that if you decide to go with a long term rental, you won’t have to bother furnishing the place.
In the past, it made much more sense to furnish properties for tenants, but in terms of supply and demand, it has now evened out and that’s no longer the case. In modern times, there simply aren’t that many people interested in having a long-term rental which is furnished. The vast majority of tenants prefer to choose their own furniture and have the place decorated to suit their own taste. It really just doesn’t work anymore to furnish a long-term rental, because it runs counter to what the majority of renters really want.
Considering that long-term rentals last for six months or more, it really isn’t worth your while to put furniture into your rental which probably won’t appeal to individual tenants. This being the case, the answer to whether you should furnish a property or not boils down primarily to whether or not you intend to rent it out as a long-term property, or a short-term one. Even if you already have some furniture which could be used to furnish the place, it’s just not worthwhile to do so, because it’s very likely that any long-term rental tenants will prefer to install their own furniture.
Saturation is a huge issue for vacation/furnished rentals also. In the last 5 years, the number of rentals on Air BNB and VRBO etc. quadrupled meaning the furnished market is saturated and competition very high…This is now causing the owners of these units to drop their rates to keep their properties occupied.. Resulting in lowered income.