I am looking at medium-term furnished rentals for the ADU I am planning, and the numbers are different enough that I cannot stop thinking about it
My situation is a 680 square foot detached cottage I am penciling out in Portland, Oregon, projected build cost around $190k all in. Standard twelve-month lease in this pocket of outer Southeast would get me roughly $1,450 a month, so about $17,400 a year gross before vacancy and maintenance. I have been running the furnished medium-term numbers, targeting thirty to ninety day stays, mostly traveling nurses at OHSU and relocation contracts, and the comparable furnished units nearby are clearing $2,100 to $2,400 a month on average occupancy of about ten months a year. That is $21,000 to $24,000 gross, so somewhere between $3,600 and $6,600 more per year for the same box. The management load is higher and furnishing costs me maybe $14,000 upfront on top of the build, but even at the low end that spread pays back the furniture in under three years and then it just runs better than the long-term number. The risk is occupancy. If I drop below eight months filled I am behind a stable long-term tenant, so the model only works if the demand in that corridor stays where it is, which it has for the last four years based on what the furnished rental managers I have talked to are telling me. I am not pulling the trigger on the build for another fourteen months minimum, but the income strategy is the thing I am actually deciding now, because it changes how I spec the unit, the kitchen finish level, the parking situation, the washer dryer setup inside versus shared. Long-term you can cheap out on a few of those. Medium-term furnished you cannot.
