Even under normal circumstances it's hard enough to know exactly how to get the right tenants. Now with COVID-19, it's hard to know if you will get tenants at all. So here is a guide to help you get ahead of the competition and ways you can get your income property rented the moment the market opens up.
If you haven't listed your property yet or want to rethink your level of financial risk, we recommend reviewing the pros and cons to renting short term vs long term, furnished or unfurnished. There are many things to consider before putting your place out on the market to find the right renters.
Starting with, what type of rental do you want to own? How much work should you put into a rental? What type of furniture or even renovation materials might you need? All of these are important questions to ask yourself as a landlord. They can determine the level of success you have straight out of the gate. Before you list your property on the market, here is what you need to know.
To Furnish or Not To Furnish? Short vs Long Term Rentals
Types of Rentals
There are multiple types of rental properties you can invest in, each with their own advantages and disadvantages. Ensure that the property you choose is the property that best suits your needs and warrants a good return on your investment.
Short-Term Rental
Short-term rental properties are generally located in high traffic central hubs where people travel to for work, unique tourist attractions, or for studies. For example, Niagara-on-the-Lake is known for its wine, while Blue Mountain is known for its picturesque mountainous views and seasonal attractions. Visitors flock to these areas and are willing to pay more for an experience they can’t get at home!
BENEFITS Financial Benefits
Perhaps the most important pro for a short term furnished rental on sites like Airbnb or Homeaway is the ability to reduce your level of financial risk.
It avoids the situation where renters aren't paying rent and potentially lengthy legal battles.
It reduces the level of wear and tear on your property compared to long term renters.
You can quadruple your profit because you can rent it out multiple times within a month
You can charge more during peak seasons
If you still prefer long term renting, offering furnished homes allows you to earn money during transition periods in-between long-term tenants. Even when you can't find a tenant right away, you won't be sweating the mortgage payments.
Insurance companies like The Co-operators have specific renters insurance for short term rentals like Airbnb
Sites like Airbnb have extra insurance for their hosts and can take security deposits on your behalf
Furnishing can be done on a budget. You can buy expensive-looking pieces without the hefty price tag
You have control over how often you rent it out (stay in it one week, rent it out the next!)
Finding Good Renters Fast
Get 10x more views on Airbnb when you showcase an impeccably styled and designed property.
Get 70% more bookings when you earn Airbnb Plus Status by having a nicely styled listing and beautiful photos. A professionally designed space can allow you to have the best Airbnb design that offers you a return on your investment.
You can target specific demographics such as business travelers or families. With rating systems and extra security measures such as a minimum number of 5-star reviews, you are able to reduce your renter risk. You can also decline whomever you wish if you don't feel comfortable.
Things to consider
Short term rental rentals require a furniture budget
It costs to insure and maintain furniture
Furnished apartments can sometimes deter long term renters if they have furniture they’d like to bring with them
There is more work involved with managing a short term listing with booking cleaning in between guests. However, there many businesses like luckey.com that does it all for you (much like property managers)
The main drawback to the shorter term rentals is that they require more frequent cleaning and maintenance. However, you can include a cleaning fee in your price to account for this added cost factor.
WHAT YOU'LL NEEDYou don’t need much to make a short-term rental come to life. If you’re decorating a rental property on a budget, focus on the essentials. Pay close attention to the areas of the home that are likely to get the most foot-traffic. Generally, this means the kitchen, living room, bathrooms and bedrooms. Take a minimalistic approach. Stuffing your rental with decor can make it feel cluttered.
We recommend investing in a well-structured sectional or sofa in a durable fabric so that you don't have to replace it often. Basic appliances, such as a simple coffee maker, toaster and oven are a must. So is a comfy bed, linen, towels, and pillows. Faux plants add a nice lively touch, without the maintenance. Check out some of our favourite Wayfair items above for inspo!
Pro Tip: Use all-white bedding. Why? The answer may surprise you. In the 90s, hotels discovered that their guests felt white was the most luxurious colour, resulting in a better night’s sleep. Since then, it became standard practice to use all-white sheets in hotel rooms across the world. Plus, if a guest stains a set, you can save a lot of money by just popping it in the wash with some bleach!
Creating the best Airbnb design takes time, energy, and expertise. It can be overwhelming trying to tackle such a large task on your own. Interior design doesn't have to be expensive or difficult. We offer affordable online design packages to help you attract the right renters fast!
Maximize Your Profits By Knowing your Rental Category
Vacation Rental
A vacation rental is a short-term rental property that typically gets rented out for a month or longer. Vacation rentals are mostly located in tropical destinations or tourist areas where there are lots of attractions and activities nearby.
BENEFITSThis is a great option for people who love to travel or who split their time between two homes. If you're one of those people, renting out one of your properties part-time can allow you to supplement your income.
There are less visitors to your property overall, which should decrease the wear and tear on furnishings.
You have a solid stream of income coming in regularly.
The nice thing about owning a vacation rental property is that generally the tenants look after the property for the duration of their stay. Therefore, it is not necessary to clean as frequently as you would a short-term rental property. Expect to furnish a vacation rental if you want to find any renters.
WHAT YOU'LL NEEDOwning a vacation rental can be exciting if you are creative at heart. It allows you to play around with themes and have some fun with design elements. When people are on vacation, they want to feel relaxed and trouble-free. Create a dreamy vacation house design that gives them this experience. Here’s how:
Include ample storage space so that they don’t have to live out of their suitcase for a month.
Think about comfort elements, such as fluffy pillows and cozy blankets.
It is smart to include a nod to the locale in your design. Visitors like to feel like they are somewhere different when they are on vacation. Ex. If you have an oceanside property in Nicaragua, why not include some wooden accents or nicknacks from a local vendor?
If you are not quite sure where to start, check out our article, 3 Beautiful & Affordable Vacation Rentals We Love, for inspiration!
Corporate Rental
A corporate rental is a temporary rental property that targets business executives traveling for work. Generally located in the big business hubs of the world, such as Toronto, Montreal, and Vancouver, a corporate rental is a great alternative to a hotel. This property is fully furnished and provides all the comforts of home for business travellers while they are away.
BENEFITSYou can make bank! Landlordology explains that you can make upwards of $4500 per month starting a corporate housing business.
This property require less follow-up
There is significant money that goes into starting and furnishing a corporate rental property. High ranking executives expect a property that has all the amenities they would need to get their job done properly. This includes fast internet, water, electricity, phone and expensive furniture that is secure.
WHAT YOU'LL NEEDA sturdy, spacious desk and ergonomic chair are imperative. Executives need a place where they can work comfortably without distractions
Ample storage
A solid bed and high-quality sheet and pillow set is a must. Since your renters are traveling for work, they need a good night's sleep so that they are alert and energized for their meetings and presentation pitches
A well-stocked bar area and kitchenette for after hour get-togethers
Top-of-the-line TV with good audio capabilities
Good lighting
Pro Tip: Read our Home Office Design Essentials article for a rundown of our full interior design process. There, you will also find some of our favourite suggestions for ergonomic office furnishings!
Long-Term Rentals
A long-term rental is a property that tends to see an influx of individuals or families settling for an extended period of time. Investopedia explains that a great neighbourhood is key for attracting great tenants who will stay longer! For instance, having a good elementary or high school in close proximity increases the likelihood that a family is going to stay for the duration of their child's education.
BENEFITS Rent stability month to month with rental agreements
less flip over and listing management
no investment needed in furniture if you are renting unfurnished
You can require credit checks and bank statements for potential tenants
Things to consider
There can be very strict tenant laws that favor tenants rather than landlords. Eviction can often be a lengthy process.
Tenants can often bring in pets without your approval and you have no recourse
Damage deposits are sometimes illegal ( check your local laws)
You are stuck with your renters for the length of an agreement even if they prove to be difficult or damage your property
How many months can you carry the mortgage in between tenant changeover? Again, a furnished long term rental can help with this issue. A combination of long term and short term furnished rentals can offer you the best of both worlds.
Renters like to visualize the space they are considering to make sure it’s the right fit. It is hard to visualize yourself living in a space when it is empty hence why home stagers are so popular.
WHAT YOU'LL NEED
The amount of work involved depends on if you choose to furnish your property or not. If you don’t, there are small things you can do to make your rental more appealing to renters.
You can give your walls a facelift by adding a fresh coat of neutral coloured paint. This will brighten up the space and make it look like new again. Some of our favourite colours are: white, warm or cool-toned greys, or light pastels.
Paint or stain kitchen or vanity cabinet doors to give them an updated feel.
Change out any knobs that look outdated. Opt for sleek, timeless, and non-ornamental knobs that will stay in style longer.
Add a simple and inexpensive backsplash to your kitchen. Subway tile works great!
Instead of installing all new floors, cover-up a gnarly looking floor with some inexpensive vinyl tiles.
Add a few large plants to liven up the space and clean the stale air.
Replace outdated light fixtures. We recommend modern styles with LED lights because they last longer and are more environmentally friendly.
Get a new shower head. This simple fix will make your shower look more appealing to renters during viewings.
Finish the basement so it is livable.
Make Your Investment Pay For Itself
If you are planning on furnishing or decorating a rental apartment on a budget, find good tenants fast by choosing the best furniture for a rental property.
Whether you own a short-term, long-term, vacation or corporate rental property, there are things you can do to entice renters to your property fast. We have online design packages to get your rental property designed fast, on budget and have everything you need shipped to your door. Reach out to us to get ahead of your competitors!
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