Tina Villis

Why Fully Furnished?

Why are Property Owners renting their properties Fully Furnished?

 

For many property owners, renting furnished properties just makes good sense and provides flexible options. The property is ready to go for short term accommodation, that is from 3 nights, 3 weeks to 3 months, or can be offered for longer term leases say for 6 -12 months. An additional plus is that the property can be offered for sale, as it is already ‘dressed’ for sale.

These days furnished properties offer much more than a studio in a loft, in fact furnished properties can be amongst the most luxurious rentals available and can significantly increase return on investment.

Fully furnished apartments or homes are move-in ready which makes them the perfect solution for:

  • ex-patriats working overseas on contracts
  • the executive relocation market
  • holiday makers
  • homeowners needing to vacate a property for building repairs covered by insurance
  • buyers needing accommodation between settlement of properties

One of the main reasons for renting a property fully furnished is the financial gain; upfront costs may be higher however this is balanced by achieving higher rental rates. The financial benefits continue at tax time as furnishings depreciate over time and this depreciation can often be written off quickly. This allows for immediately reaping the benefits of the investment which can continue over the life of the apartment with redecorating and upgrades.

The other Pros for renting a property fully furnished include:

  • a ready-made flow of potential clients
  • the property can be upgraded or updated at any time
  • attracting high-quality tenants who want to avoid long stays in a hotel room
  • less damage to doors, walls and carpets from moving heavy furniture in and out of the property

Having considered all the pros, there are inevitability a few cons to renting a fully furnished property as there will still be maintenance to attend to and the additional cost of utilities, Wi-Fi, insurance and cleaning. However, management companies like australianluxurystays.com.au can make the entire process easier for you. We have a simple step-by-step process that can get you started and help prepare properties with proper staging. With our help you can be ready to move into the market faster than you imagined.

 

For the tenant, renting a fully furnished property is the smoother way to make a move – with no furniture to move, potentially all you need are your clothes in a suitcase, grab your laptop,  into the car and you’re on your way.

Tina Villis

WEIGHING UP THE PROS AND CONS OF SHORT TERM/HOLIDAY ACCOMMODATION – THE CONS

Just a re-cap, a SHORT TERM / HOLIDAY RENTAL refers to renting a furnished property on a short term basis, considered to be for a period of less than 3 months. In the previous post I explained The Pros in detail. Now it is time to turn to The Cons.

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THE CONS

  1. MORE MAINTENANCE AND UPGRADES
    When your business is managing short term/holiday rentals you will need to maintain the upkeep of the property to a high standard or you could receive negative guest reviews. Not only does this include things such as regular cleaning, maintenance such as running taps, blocked drains and paint fixes, it also takes into account changing technologies, such as Smart televisions, Foxtel, Netflix, Wi-Fi access and the like. Rental amenities will need to be updated every so often to include all the essentials and more for a pleasant stay – this can come with a hefty price tag.

    You may need to refurbish every few years or so as the guests who seek this type of accommodation from the higher socioeconomic bracket expect the highest quality fit-outs and all mod cons.  They are also prepared to pay at the higher end.

  2. INCOME NOT GUARANTEED
    This option may not suit you if you need a consistent rental income. Short term accommodation can mean an increase in vacancy periods, particularly where occupancy is seasonal.  This can be overcome if your accommodation agency has a good relationship with relocation companies, government agencies or global corporations needing furnished properties for their clients or employees all year round.

    While peak seasons are fully booked, off-peak bookings are scarce which will cause a drop in income. While rates can be adjusted to compensate for seasonality – raised for periods of higher demand and lowered for quiet periods – regular bookings and income are not always guaranteed.

  3. COMPETITION FROM SURROUNDING PROPERTIES
    Unlike the residential housing market where properties are swamped with interest from prospective tenants, the holiday rental or short term market sees many more homes listed than travellers/guests searching. Depending on location and availability there may be fierce competition between properties in the area.

  4. FINANCIAL OUTLAY
    If property management is outsourced, management fees will be higher to account for the additional hours associated with resolving more frequent bookings, scheduling housekeeping services, servicing and maintenance of equipment, management of supplies and so forth.

    There will be establishment costs depending on the owner’s requirements, including a full inventory, professional photography, refurbishing and redecorating advice and assistance.

  5. TOO MANY THINGS TO MANAGE

For some owners, short term/holiday rentals are a retirement-hobby vocation, for others it is a full time role. There are plenty of tasks to occupy time involved in every guest stay, from ensuring accurate calendar availability, facilitating a seamless booking process including ‘meet and greets’ and departures, not to mention arranging cleaners, gardeners and the rest – short term holiday rental accommodation can be hard work if you don’t have the right tools to do the job.

 

Finally, it is important to say that owners need to be aware of both the Pros and Cons to choose the option that best suits them.

Tina Villis

WEIGHING UP THE PROS AND CONS OF SHORT TERM HOLIDAY ACCOMMODATION – THE PROS

In my previous post, I explained the difference between short term holiday rentals and long term rentals. Just a re-cap, a SHORT TERM / HOLIDAY RENTAL refers to renting a furnished property on a short term basis, considered as a period of less than 3 months.

THE PROS

  1. MORE FLEXIBILTY
    For owners who rent their properties short term there is a lot more flexibility as you can specifically block off calendar dates that you want to keep free for your family and friends without inconveniencing anyone. This option works if you own a holiday home and is also great for investors who live interstate or overseas and use their property for recreation or for business.
  2. LESS WEAR AND TEAR
    In general, short term rentals range in length from a few nights to a few weeks maximum so your property is always maintained in pristine condition.  As guests are staying for short periods, there is less chance they will be thinking about redecorating or re-arranging furniture. With regular housekeeping services, your property is monitored frequently, and any maintenance issues can be attended to immediately.
     
  3. HIGHER RENTAL RETURN
    There is superior rental return for the right property in the right location with a property management company specialising in accommodation. Fluctuating rates can be set over high and low seasons with set minimum stays. Peak periods ensure that you will receive maximum profits. In addition, seaside holiday homes can be subsidised with holiday rental income if the investor is seeking both a lifestyle and an investment.
  4. TAX BREAKS AND DEDUCTIONS
    Many short term/holiday rental owners are entitled to certain tax breaks or even deductible expenses because the property is not being leased long term. There are tax advantages associated with depreciation on furniture packages, for example, however be sure to check with your accountant regarding the rules and regulations on this option.
  5. ADDITIONAL INCOME, SAVINGS AND CAPITAL VALUE BENEFITS
    If you are away for a length of time such as on an overseas trip, you can receive extra income by offering your home as a short-term rental and having your property managed and maintained will provide you with peace of mind.
    Refurbishment of your property can also mean that the presentation is contemporary and inviting, with the additional bonus of increasing the property’s capital value.
    If moving overseas for a period of time, renting your property furnished will save on storage costs.
    If you have purchased a new property and are unable to sell your current home, the option of receiving income from a short term rental can be appealing, while you wait for the property to be sold.
  6. CONTRIBUTION TO THE SHARING
    This style of accommodation is becoming increasingly popular as it offers an alternative to a hotel or serviced apartments and it can be cost saving, accommodating more than one group of people.
    You will attract different clientele by aiming at the executive relocation market and overseas visitors.
    You will be contributing to the sharing economy which has an all-round benefit for the wider society by bolstering tourism and local cultural exchange as guests share in your community’s modern way of living and thinking. 

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