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“I am considering setting up a furnished property”
In this section we will examine some of the typical reasons for setting up a furnished property, some typical guest profiles and then provide some guidance for furnishing a property.
Setting up a furnished property is an excellent way to enable higher returns and more flexibility. There are three main reasons why people decide to set up a furnished property:
- To increase the return on their investment
- To be able to use the property from time to time
- To make their home available as a holiday rental from time to time
Furnished properties can meet the specific needs of different guests. Equally, each property can be set up to meet the needs of individual landlords. In the table below you will find some examples of this.
| Type of property | Type of guest | Type of Landlord |
| Example 1:
Inner city studio in hotel-style complex
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Jennie is a typical short stay corporate guest, interested in staying in building with hotel style accommodation at a discounted rate.
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John is an investor, mostly interested in achieving higher returns by operating separate from hotel management.
Hotel will typically only offer John a very low guaranteed rental amount.
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Example 2:
Inner city 1 bedroom in residential complex
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Alex originally only wanted this apartment short term while he was relocating to Sydney. After looking around he decided that he liked the apartment he was in so Alex took long term lease for 6 months.
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Kim first bought the property as an unfurnished investment. Now she wants to use the property from time to time when she visits family in Sydney.
Kim now has a better return on her property plus she gets to use it herself from time to time.
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Example 3:
Beachside 2 bedroom apartment
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The Varley family is in Sydney for 2 weeks and they want to be near the beach. They like this property because it is also near their grandparents home, who they are in Sydney to visit.
They are interested in being able to cook, clean and take care of themselves. They didn’t need daily servicing as they are tidy people. All they wanted was air conditioning and a DVD player to keep the kids busy on rainy days.
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Samantha bought this property as an investment during the property boom. Now with another interest rate rise she needed to find a way to make sure the mortgage was covered. She furnished the property and gets the best of short term rental over the summer and long term furnished rental over the winter.
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The first step in setting up a furnished property is deciding what you want from the property. For example, if you want to be by the beach and use the property yourself over summer then you will need to find a property that suits you. Chances are that if you like a property for, say, its view of the beach, then others will also like the property for similar reasons. On the other hand, if you are primarily interested in investment & return on your investment, then you should first speak to a furnished property manager. They will be able to tell you what areas have the strongest demand, demand for 1-2-3 or more bedrooms, demand for car parking, the buildings to buy in and the buildings to avoid. They will be able to show you examples of properties that do best so you can emulate successful investments.
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Factors to consider if you are purely interested in running the property as an investment:
-Location; tourists want to be either in the city or by the beach. The more well known a location is then the better it will do. For example Darling Harbour and Bondi Beach are very popular suburbs. Other popular areas can be found in the lower north shore, eastern suburbs and inner west.
-Zoning; if you purchase a property in a residential building then you will be restricted by a minimum stay. If you purchase a property in a hotel style complex then you will not have any restrictions placed on you regarding minimum stay requirements. You will also be able to compete with inflated hotel rates, giving you higher rates of occupancy.
-Furnished; buying a property that is already furnished will save you time and money, as long as the furnishings are of reasonable standard.
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Once you have a property you will need to furnish it. Furnishing a property can at its best, lift a property into higher occupancy and higher returns. At its worst however, the furnishings and décor can stifle a property and make it a not so great investment.
Furnishing a property can take up a lot of time. Time to get trades people in, time to order the furniture, time to put the furniture together, time to set up utilities and waiting for technicians. You should allow around 6 weeks for furniture to arrive if you are buying it new. Below is an example of a schedule for setting up a property. This is just a guide as every property is different and some will not need renovations.
| Week 1 | Book trades people:
Electrician - new lighting, new sockets
Plumber - new bathroom fittings
Flooring – new floating wood floors
Tiler - new tiles in bathroom and kitchen
A/C – installation of new A/C unit
Order furnishings for living, dining and bedrooms
Arrange spare keys and security cards through strata manager.
Arrange utilities:
Gas, electricity
Book appointments in week 5 for:
Telephone line tech, cable TV install
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| Week 2 | Check on progress of tradespeople – meet on site and provide spare keys if required
Order whitegoods;
fridge, washer, dryer, dishwasher
Order browngoods;
TV’s, DVD/stereo, alarm clocks, telephone
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Week 3 | Check on progress of tradespeople
Purchase soft furnishings;
Pictures/mirrors, easy to clean/hard to break ornaments, rugs, outdoor table and chairs, second books for bookshelf, hat stand, bedside lamps, shower hanger, new shower screen, etc.
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Week 4 | Check on progress of tradespeople
Purchase kitchenware
Contact property manager for assistance with completion of property user guide (welcome letter for guests)
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Week 5 | Finalize tradespeople (final payments due)
Fit out property with soft furnishings and kitchenware
Window cleaner to attend property
Contact property manager to arrange meeting at property. Handover of management agreement and at least 3 sets of keys all with required security tags. Property manager to take temporary photos (e.g.- front of building, view, kitchen) and list property on website.
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Week 6 | Delivery of living, dining and bedroom furniture
Assemble furnishings
Delivery of whitegoods and browngoods
Assemble/setup
Meet telephone tech and cable TV tech at property for setup of services
Property manager arranging cleaner to fit out property with linen & towels.
Property manager arranging professional photography and virtual tour to be added to website listings.
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Just as all properties are different, the level of renovations (if any) and the standard of furnishings will also differ from property to property. You may have an older style property that needs a lot of work done to it, or you may purchase an apartment in a hotel-style complex with all the furniture included in the purchase. There are advantages and disadvantages to each.
If you buy a property that is ready to rent furnished on settlement then you will most likely be paying a bit more for it. You will also be stuck with the property as it is, so if you planned to use it for yourself from time to time you would need to be happy with the furnishings. On the other hand, If you have a property that needs a bit of TLC then you could find you are taking on the equivalent of a second job whilst you organize tradespeople, shop for furnishings and sit waiting for phone and pay TV technicians to show up. The benefit of this of course is that you will have the property just the way you want it, giving you a new home away from home.
The quality and design of furnishings is an area that is at times extremely personal. As a general rule, you can’t go too wrong with simple, modern, neutral furnishings. The property can always be given a dash of style and colour with soft furnishings such as prints, cushions, rugs and other ornaments. Furnishings should be highly durable but not overly expensive. Too cheap and the furnishings will need replacing frequently, too expensive and even fair wear and tear will concern you.
Your property manager can usually assist you with a decision should you get stuck. Below are a few tips to help you:
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Tips when furnishing a property:
- Contact a property manager before purchasing anything. Often items such as linen & towels are provided by the agency. The property manager may also have pre-arranged discounts at certain stores. It can be frustrating to realize you missed out on saving hundreds of dollars and hours of your time!
- World Apartments can provide you with all the information you need to set up a property correctly. To find out more contact info@worldapart.com.au and ask for our detailed guide to setting up your own furnished property.
- Get a sofa bed if you have the room. It will mean that you can offer more flexibility for guests. This may not increase the nightly rate by much, but you will also increase the occupancy rate.
- Where possible try to have hard floors. They are longer lasting and easier to clean.
- Good quality electrical equipment such as flat screen TV, large fridge, reverse cycle air conditioning and top loading washing machine will last longer and increase both the nightly rate and the occupancy rate.
- Pay TV can sometimes make or break a deal. If it’s available in your building you should get it installed. Make sure that you put a password on the account and that the pay-per-view services are disabled.
- If you want to provide a BBQ make sure it’s a simple, strong, easy to clean one. Just a single hotplate with gas burners is best.
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To learn more about the services World Apartments offers please move onto the next section: NEXT
“I have a furnished property, but it is not managed by World Apartments”
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