Last week, Brick Underground looked at how to avoid illegal listings and scams when looking for short-term rentals in New York City. Such apartments are hard to find thanks to the rules in co-ops, which dominate the housing inventory here, and because of city regulations.
This week, we’re going to take a look at another small subset of the rental market, the furnished apartment. These two subsets overlap, but you may also find furnished apartments listed for regular lease terms. Furnished listings are very different animals than typical, unfurnished apartments. Furnished apartment are typically more expensive to rent, and they are trickier for brokers to work with.
“Furnished units are always more difficult for brokers to work with because there is one more thing the tenant must approve—the furnishings,” says real estate agent Elizabeth Kee of CORE. “Every landlord's—and tenant's—tastes are different. If a tenant is committing to a long-term lease, they will require the furnishings fit their needs and are their preferred style.”
But there’s a real demand for furnished apartments from business people on assignment and those who want to test the waters somewhere before a move. There’s also interest from travelers here on an extended holiday, students, interns, job-seekers, those who have family or friends with long hospital stays, and people who are between houses or renovating their primary residence.
For owners looking to rent out a furnished apartment, there are some important precautions to take to protect yourself and your place. For starters:
1) Get insurance
When it comes to insurance, if you are renting out a co-op or condo, your insurance is done through the policy for your new primary residence, says Jeff Schneider of Gotham Brokerage (FYI, a Brick Underground sponsor).
“You cover the contents you leave in the apartment, the internal structure of the apartment, and premises liability," he says. "Your tenant should have renter’s insurance to cover his or her own property and liability and should have at least a six-month lease."
"Most insurers will not cover Airbnb-type situations," Schneider adds. "If you are subletting your rental, we have few options.”
For more advice, we polled several brokers who work with furnished apartments.
2) Make a list of your furnishings
"Owners should make a list and take photos of all the furniture and other remaining belongings and note the condition of each item. Both owner and tenant should sign it and agree on compensation method in the event of any damage. Natural wear and tear doesn't count."—Limor Nesher, broker, CORE
3) Make the security deposit a big one
"Holding a hefty security deposit is the best way to minimize wear and tear. Also, restricting pets can be a way of trying to preserve furnishings. Have a pre-lease signing walk-through and have the tenant initial next to each item on the lease addendum. It might be tedious, but it might be needed at the end of the lease term if items are missing or damaged."—Elizabeth Kee
4) Coasters are your friend
"I think the least-celebrated kitchen item are coasters, they are invaluable to long-term care, and yet virtually no one uses them. We all know they protect wood from the dreaded water rings, but they also protect stone countertops from the water rings. And once you’ve damaged your countertops, it’s difficult and often expensive to repair them. Often they will have to be replaced. The lowly $5 coaster can save you thousands."—Marie Bromberg, broker, Corcoran
5) Build in a premium
"Furnished apartments are expensive pretty much no matter what. It is either going to have a premium built in or furnishing a short term-rental could cost at least $1,000 extra per month at the least. But if you absolutely need to do it, either try and use one of the top furnished rentals companies or short-term furnishings like Cort."—Joshua Arcus, president, Siderow Residential
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