Our mistaken strategies (part 1)

By preparing and writing this series of posts, I drew two new important conclusions.

Conclusion #1: renting out furnished studios wasn’t such a good strategy after all

We decided to rent out furnished studios. We knew it came with disadvantages, such as:

• more expenses to buy and later fix and replace furniture;
• more hassle to arrange a nice place to live;
• more complications in the draft of the rental contract;
• more risks as things can actually be broken but French law forbids landlords from asking for a higher safety deposit;
• short notice when the tenant wants to leave.

Yet, we furnished our studios because:

• we wanted to give our tenants the best experience possible ;
• we thought it would limit vacancies by making moving in very simple, especially for students;
• we thought renting out a furnished flat could bring us more income because it justified a higher rent.

But the reality is quite different:

• not all tenants are thankful for the extra effort you put in preparing a nice place to live;
• our experience so far shows furniture doesn’t seem to limit vacancies;
• it actually makes vacancies longer because we only have a one month-notice (instead of three in unfurnished flats);
• if it does make moving in a simple thing, it also makes moving out easier (it is so easy when you just have a couple of suitcases to pack);
• it doesn’t justify much higher rents in the tenants’ eyes (we actually had to lower the rent of one of our studios).

So Fred and I have been talking about changing strategy and renting our studios empty. Fred made a good point when he explained to me that he didn’t think that a longer notice would change anything as people usually want to move in right away. Therefore, if our agency finds somebody quick but tells him/her that the flat is only available in two months, they might not be interested anymore. Also, Fred was wondering where we would store the furniture (I guess we could just sell them). Anyway, renting our flats empty might not be the ultimate problem-solver but it is definitely something to consider and think about. See you tomorrow for conclusion #2!