Furnished income properties in DC are a great way to make more on your investment while attracting a higher number of renters. People love the flexibility and freedom that furnished units provide, and if you’re renting to students or have short-term lease options, furnishings are a must.
But furnishing your income property has its challenges. If you’re planning on renting out your unit with all the necessary furniture, here are a few things you should know to protect yourself and your investment!
Never Furnish With Items of Personal Value
It doesn’t necessarily matter if your items have monetary value—if any furnishings have meaning for you, such as a family heirloom, don’t furnish your income property with these items.
The potential for damage is too high, and it won’t be worth it if tenants irreparably break these items. With shorter leases, people may be less likely to care about the unit. Don’t furnish with anything that has personal value for you. Instead, opt for generic pieces that can easily be replaced.
Have an Inventory
Always take inventory of items in the unit, including all large and small pieces of furniture, rugs, utensils, kitchenware, décor, and any outdoor furnishings. Take photo documentation but also have a checklist for most of the items.
Go through the checklist with renters when they move in. This way, everyone agrees on what is in the unit at move-in and what should remain in the unit once the lease is up and your tenant vacates the premises.
Increase the Security Deposit
If you’re furnishing your income property, consider charging more for the security deposit. Repairing and replacing furniture is an added expense, and renters looking for furnished properties will expect both a higher security deposit and a higher rent amount.
Keep in mind that while you can retain part of the security deposit for broken items and repairs, you can’t do the same for general wear-and-tear. Some wear is to be expected, and you’ll have to manage these costs yourself.
Remember to Deduct Percentage of Costs for Taxes
While you can’t charge tenants for general wear of the furniture in your income property during their stay, you can claim a percentage any year you add furnishings and report depreciation on your taxes. While this won’t add up to a large amount every year, it will benefit you over time!
Get Insurance on Your Items
Your landlord insurance policy should cover the furnishings in your unit, but go ahead and double-check your policy to be sure. Also, note that the renters’ personal items will not be covered unless you require them to have renters’ insurance.
Having the right landlord insurance policy will help cover your furniture if a flood or fire damages the unit. These are disasters your tenants may not be responsible for, so you can’t withhold any amount from the security deposit for replacement or repairs.
Consider Checking in With Tenants More Often
It’s a good idea to routinely check in with tenants whether or not your income property is furnished. But doing so with a furnished income property is especially important because it gives tenants a chance to report issues that they may not have taken the time to report themselves.
This simple step can help increase tenant satisfaction and help you stay on top of any issues. Normal maintenance of furniture helps you easily fix items now instead of waiting until major damage occurs later.
Let Our Team at FAS Handle the Details
With decades of experience in property management in DC, the FAS Management team can help you navigate the details of renting out your furnished income property. We can draft a checklist, an enforceable lease, recommend the right insurance policy, and take photo and video documentation of your unit. Give us a call today to find out more about our professional property management services at (202) 337-5080!