Guide to Furnished Apartment Rentals: Step 1

Guide to Furnished Apartment Rentals- Step 1 What are you going to get out of your unit?

Do you own an apartment or are thinking about buying one to rent out on a shorter-term basis? There are a lot of things to take into consideration and questions to ask yourself when deciding to rent out your apartment. We have put together a guide to help you understand the steps that need to be taken in order to find success.

Step 1: What are you going to get out of your unit?

It is important to understand what kind of profit you will be able to get from your specific apartment. Determining this, helps you decide whether it is worth your time and money to proceed in renting out your apartment short-term. Before starting you need to have a good idea of what kind of revenue your unit could bring in on a monthly basis. Additionally, how does this profit compare to renting your place out unfurnished?

As a good estimate you can take a look at data from site like Airbnb and other renter sites to get a feel for how much a unit similar to yours is being rented for. However, just because you see a unit that is very similar to yours being renting out at an attractive price, that doesn’t mean you are good to go. In general your total profit is going to be a reflection of this equation Total= nightly rate x number of nights occupied.

Sounds simple right? Well there are other factors to take into consideration. For example, seasonality is a huge player in many major cities like Toronto. While you might be able to charge a premium in the summer months when travel and tourism is at its peak, the winter months you may need to significantly discount your place. Is that something you can afford to do?

In addition to all this fun math, have you considered your furnishing budget? You need to take all forms of cash flow into account in order to properly estimate how much money this process is going to cost you. Renting an apartment out furnished will allow you to charge more for rent, however it also takes more work and maintenance. We will discuss the process involved in strategically furnishing your apartment in a later blog post. Arguably the most important factor to consider before even starting the process of preparing you place for short term renting is do you have the time invest?