To Furnish or Not

[nepoez]

Hi guys/gals,

I have never been a renter before, but I would imagine if I were, I would not want to sleep in a bed someone else has. At least not for a long time.

I am wondering what your opinions are on installing luxury(looking) furnitures in rental. Will is attract tenants? Will is bring in higher rent?

 

[TommyK]

QUOTE (nepoez @ Nov 16 2008, 01:39 AM) Hi guys/gals,

I have never been a renter before, but I would imagine if I were, I would not want to sleep in a bed someone else has. At least not for a long time.

I am wondering what your opinions are on installing luxury(looking) furnitures in rental. Will is attract tenants? Will is bring in higher rent?

I have spoken to one of Alberta`s largest corporate furnished suites provider, The Imperial Suites. They partner up with investors who have condos for furnished suites. They charge anywhere from $2800-3300 depending on the location and bedroom size. While the amount might seem high, the company takes over the full management for the investors.

http://www.imperialsuites.ca/Default.aspx (check out their website. Rates are under Service Locations)
http://www.hotelalternative.ca/ContactUs.aspx (Hotel Alternatives Members)
http://www.chpaonline.org/# (corporate housing industry association)

The critical point here is that you have to have good connection with big corporations. Most people won`t pay top dollars for a furnished suite unless the company is paying for it. In other words, vacancy issue will be a big challenge as most companies will either pay for the 1st month until the employee finds his/her own place, or longer terms for the duration of the project (3-6 months maybe?).

Fancy furnishings may not give you the best return. What you need is solid, durable and hygienic materials and less fabric like throw pillows which collect dust and germs. Good leather sofa/couch is a great long-term investment.

Hope this helps!

Where is your condo? in Vancouver?

Regards,
Tommy

 

[nepoez]

Thanks for the feedback. It`s actually in Edmonton. From the sound of it, furnishing makes more sense for a place like DT Vancouver, or the heart of a major city, where your target clients are the short term corporate worker type. For a town house in a residential area this probably won`t make sense. Is that assumption correct?

 

[GarthChapman]

QUOTE (nepoez @ Nov 16 2008, 10:08 AM) For a town house in a residential area this probably won`t make sense. Is that assumption correct?

In my experience, yes. Especially if you only have one unit. This business works much better when you have several units.

We have owned as many as 15 units in suited houses in near inner-city Edmonton since 2003. Managing furnished units is more work than unfurnished and the rents are not quite high enough to justify the extra workload. I know others in the business who operate high end apartment condos in downtown Calgary. The returns are much better in those type of units as you can charge much more to high salaried executives - that`s where and how they want to live.

Also beware the vacancy rates in tougher times, like what we are entering into now. I was quoted by PM`s in Calgary that prior to 2005 the long-term vacancy rates were in the 30% range. Our experience in Edmonton was in the 5-8% range, but we had to work at it, and times have been pretty good.

If you are going to get into this business then really get into it, multiple units in the right areas. Specialize. Become an expert. Do your thing better than the competition.

Hope that helps,

 

[nepoez]

Thanks again. I`m going to try to focus on getting my new unit rented out first, when things are more stable I will have some extra energy to look into this area.