Rise in demand for furnished rental homes
Category RealNEWS
One effect of the rise in remote working and the growth of the digital nomad movement has been an increase in the demand for longer-term furnished rentals, and landlords can benefit by taking note of this trend.
"The demand for furnished apartments or houses has previously been restricted mostly to popular holiday destinations where short-term rentals are the norm," says Gerhard Kotzé, CEO of the RealNet property group. "But now we are seeing a significant increase in other areas, especially suburbs and estates that are close to city centres and other business and technology hubs.
"These areas are favoured by people who are able to work remotely and want to experience daily life somewhere for several months or even a year or two before moving on - or maybe deciding to stay and buy a home. There is also demand from professionals working on fixed-term contracts away from their home cities and needing rental accommodation for the contract period, and from executives who commute regularly between the city where they live and another for business and would rather rent in the second location than stay in a hotel or guest house."
In addition, he says, there is a growing number of over-60s who are travelling the world now as they look for the perfect place to retire, and they also often want to rent furnished homes for six months to a year at a time while they try out different locales.
"And most of these potential tenants, are not looking for high-end fittings, furniture or decor. What they would like are the basics that make it possible to move in and get 'up and running' in just a day or two." These items include:
- Kitchen appliances such as a fridge, stove, microwave and toaster;
- A washing machine and tumble dryer;
- Beds with good mattresses, a lounge suite and a dining table and chairs;
- Kitchen utensils, cookware and cutlery;
- Basic crockery and glasses;
- Linens, pillows and towels for each bed and bathroom.
- Curtains or blinds; and
- A broom, mop, bucket and basic cleaning supplies.
"Most important of all, though, is a high-speed and reliable internet connection,and tenants also really appreciate back-up power and water supply systems. In addition, they prefer all charges to be bundled into the rent, so they only have one amount to pay each month, with the possible exception of pre-paid electricity."
Furnishing a house or apartment to let does of course involve extra expense, notes Kotze, and there is always the risk of things getting damaged and having to be repaired, so landlords should first consult a property professional familiar with the area to find out whether there is sufficient demand for furnished rentals in that location.
"However, if there is demand, furnished homes do typically command considerably higher rentals due to the convenience they offer, especially for tenants arriving from another country or city, and this is likely to make the extra effort and financial outlay worthwhile. It can help investors pay off any bonds they have on such properties in a shorter time and save many thousands of Rands worth of interest. And for investors who have low bonds or no bonds to pay off on their rental units, the additional income can go towards buying another property, or straight into their own retirement savings."
Author: RealNet
