The pros and cons of a furnished rental

If you’re a property owner considering renting out your property, or a new landlord wondering how to make the most money from your rental unit, have you thought about keeping it furnished? Most landlords think an unfurnished apartment is the easiest way to go, but in certain markets it could be beneficial to your bottom line if you offer your rental as a fully furnished place to live. You could be looking at a higher-end tenant; a professional in an urban area in particular might find a furnished place appealing. You could also charge a higher rent – in some areas finding a furnished place is rare and, as such, in demand.

Landlords who are worried about their furnishings being damaged should take heart:  Security deposits don’t usually include the value of the furnishings, but in case anything is damaged or needs to be replaced, your insurance policy should cover it. (Check with your agent to be sure.)

A few things to keep in mind before scouring Craigslist and auctions for some nice but inexpensive furnishings are the downsides to renting out a furnished apartment. For one thing, you’ll need to keep a careful inventory of everything you’re providing tenants, from large furniture to kitchen utensils.  And that means a higher chance of having to deal with maintenance and cleaning issues, as you’ll likely be faced with the occasional need to clean, repair or replace furnishings that become damaged or go missing.

Also, people who are looking for furnished apartments are not usually long-term lease signers. They’re often starting a new job in a new place, starting over in their personal lives, or in a temporary living situation due to an emergency. So you have to be OK with that kind of turnover.  Just remember that tenant screening is just as important with a short-term tenant as it is with a long-term tenant; perhaps even more so. 

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Girl becomes homeowner, landlord at age 14

Rental property investment is a business more and more people are getting into as a second, or even retirement, career. But Port Charlotte, Fla., might have the youngest landlord in the U.S. Fourteen-year-old Willow Tufano bought a house in a short sale in Port Charlotte for $12,000. The three-bedroom house is now rented out for $700 a month.

According to news reports, the home had been on the market for $100,000 at the peak of the housing bubble. It was listed at $16,000 but Willow (and her mom) got it for $12,000. Willow put down $6,000 cash and her mom, a real estate agent, ponied up another $6,000 for the house.

The teenager, who recently appeared on “The Ellen DeGeneres Show,” said she earned her money primarily from offering a service where she clears out foreclosed houses on behalf of the new investors, picking through the stuff and reselling any goods or appliances that she can. She also spends her weekends looking for deals from garage sales and reselling them for a profit on Craigslist. She started buying and selling things at age 12 and had $6,000 saved in a year and a half.

After closing on the house, she made a few improvements and turned it around to rent, becoming a new landlord at the ripe old age of 14. Not a bad start to what surely will be a career in rental property investment.

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Four key factors to consider when investing in vacation rental property

A few years ago (OK maybe more than a few), buying a vacation rental property seemed like a dream to many. Mortgage rates were high, properties were expensive, and available inventory in prime locations was relatively small.

But this isn’t a few years ago. Today, making your dream of owning vacation rental property is within reach, thanks to more vacation properties for sale, dropping prices and lower interest rates.  If you’re in the market to become a new landlord of a short-term rental, the key is to find the perfect property to make those dreams come true. Here’s what you want to keep in mind:

1 Location, location, location. Everyone envisions a gorgeous villa on the beach with spectacular views of the ocean. While oceanfront vacation rentals are among the most lucrative, there are plenty of other locations that can bring in rental revenue year-round. Think about what attractions are around you, think outside the box. Are there excellent shopping opportunities like huge outlet centers that draw crowds from out of town. Are you near a large college with a huge following of fans that are perpetually in need of a place to stay for games, graduation and other special events?  What about great golf courses or nearby amusement parks? The more attractions that are within an easy drive of your rental property, the better chance you have of keeping the place booked.

2

 Your budget. Be realistic about how much you want to spend on a vacation rental property, including what you’ll need to spend to furnish the place for your guests.

3.The size of property you need. How many people/couples/families are you hoping will be using the property at any given time?  Though not necessary, having a bathroom for each bedroom is ideal.

4Your future plans. How often do you plan to stay at the property? Do you hope to move there one day? If so, you want to select a place that suits your needs as well, though that should be secondary if your plans don’t include moving in for several years. You never know what might change by then. 

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For new landlords, knowledge is power

Landlords who are new to the business can sometimes be naïve to the amount of things they need to know right off the bat. It’s not enough to have a great rental property ready for a tenant, or to have researched the market to figure out an appropriate amount to ask for in rent. There are rules and laws and inside information every new landlord should find out before getting that first lease signed. 

Because you don’t know what you don’t know, we’ve made it easy by outlining the most important things a new landlord should research before beginning your business. 

1. Become very familiar with the state landlord-tenant laws in the state where your rental property is located. 
2. Read, internalize and follow the federal Fair Housing Act of 1968 and the federal Fair Housing Act Amendments Act of 1988, to make sure you’re not breaking any laws regarding discrimination when screening and accepting (or rejecting) prospective tenants.
3. Research a reputable tenant screening service to carry out this most important part of your business. If you sign up with the first (or cheapest) fly-by-night screening service you find on the internet, chances are you’ll get what you pay for.
4. Join and participate in the local landlord association where you are. You can make  great contacts and get tips and insider info from this local resource.
5. Check into the building codes for your neighborhood, as well as any neighborhood association laws and rules that your tenants (and you) might be expected to adhere to. 
6. Find a good lawyer who specializes in landlord-tenant law, and use that resource to check leases, eviction notices and any other legal documents or forms of communication between you and your tenant.  

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