So, you’ve just purchased a rental property in San Francisco and now it’s time to decide: To furnish or not to furnish? This is the old age question for many landlords, and not one to be taken lightly. There are many pros and cons to either option, thus, it’s important to carefully weight each before choosing.
As of now, there are no specific rules and regulations regarding furnished or unfurnished property for landlords. It is entirely at the landlord’s discretion if they want to include TVs, couches, tables, dishes, flatware or appliances. Nevertheless, if you choose to either rent the apartment furnished or unfurnished, there are distinct advantages and disadvantages to both.
The benefit, for example, of renting your unit furnished is you get more rental revenue. For instance, say you rent your apartment furnished and you receive $4,000 a month from it. If you decide to rent it unfurnished, you may only get between $3,000-$3,500 a month for the unit.
On the other hand, although you’re getting more rental revenue, you need to consider if it’s really worth it. For example, what if once the tenant moves out, you discover they caused excessive wear and tear to the furniture.
According to California state law, landlords are able to charge at least three times one month’s rent for a furnished unit when it comes to the security deposit. However, what if one of the items destroyed had sentimental value to you? If that was the case, then no amount of money could replace what you just lost.
An example of this could be a family heirloom. Say your family passed onto you a custom made couch and you decided to use it in your unit. What if the tenant was smoking in the apartment during tenancy and you were unaware of this? At that point, your family heirloom may now have a cigarette burn or smell of cigarette smoke.
Therefore, don’t keep anything of value or anything that means something to you in your rental home. Essentially, anything you don’t want destroyed or someone walking out with. After all, rental property is a business, not something you should get emotionally attached to. Sometimes it’s really hard to find that fine line, so just avoid it entirely.
However, if you’re dead set on the idea of renting your unit furnished, here are a couple good ideas to consider:
Instead of buying expensive furniture that may cause you to worry in case of excessive damage, go with something affordable. You can still find nice furniture at a lower price at places like a consignment store or even Ikea. This way, you can get still get that higher revenue and yet, not have any attachment to the belongings inside.
One of the things you should absolutely do when renting your home furnished is have a very thorough furniture inventory. Whether it’s 14 dinner plates or 11 forks, document everything of value and be sure to incorporate that into the lease.
If you think this is a good fit for you and your rental property, then talk to us at Property Management Systems in San Francisco. We would be more than happy to discuss more in detail how we incorporate all this into the tenancy agreement and protect you as a landlord.