Furnishing a 4 room house costs $7,000 for $105 more a room

Dumb question I'd have been too embarrassed to ask in person: who owns the mattress legally and what do you do with it when someone leaves? Do you throw it out every turn? Because if you're buying a $280 mattress every 11 months per room the math in the original post changes a lot.

@compass I asked this at a meetup and got two answers. One guy replaces mattresses every tenant and prices it in as a turn cost. Another uses a zippered encasement, washes the cover, and keeps the mattress five years. The encasements were like $40. Big difference in annual cost between those two approaches and nobody seemed to think theirs was optional.

Furnish. Speed is the whole game on rooms. My last two fills went in 9 and 6 days furnished. Empty room in the same house before I put a bed in it sat 24 days on the same rent. I don't care about the $105, I care about the 18 days.

@flint that's one house and two data points though. Six months of watching listings in my area and the furnished ones do move faster, but they're also the nicer houses. Nobody puts $1,100 of furniture into a room with a stained carpet. I can't separate the furniture effect from the everything else effect.

Furnished changes what you do at move out and it changes your disputes. Unfurnished, you inspect walls and floors. Furnished, you inventory 20 items per room and argue about whether the desk was already scratched. We photograph every item at move in with a date stamp and it still takes an extra 40 minutes per turn.

The middle option in your post is what most of our owners land on. Bed and mattress in the room, fully furnished common areas, tenant brings their own desk if they want one. It photographs as furnished and the item count you're tracking drops by two thirds.

Whatever you buy, put a $12 felt pad under every leg and use real hardware on the bed frames. Half the furniture failures I've been called to fix were flat pack cam locks that worked loose and nobody tightened them for a year.

Your payback number is doing too much work. $7,000 against $5,040 a year of premium is 17 months only if the premium is real and the furniture lasts. Model it as an annualized cost instead. Assume a 4 year useful life on soft goods and 7 on frames and tables, and you're running maybe $1,500 a year in depreciation plus replacement, call it $1,900 with breakage. So the premium nets to roughly $3,100 a year on a $7,000 outlay.

That's still fine. It's just a different decision than a 17 month payback. And the whole thing flips if @flint is right about days on market, because 18 days times four rooms at $795 is $1,900 a year all by itself.

I voted for the middle option and I'm not confident about it. What decides it for me is whether the tenant type is someone relocating for a job for nine months or someone local who lost a roommate. Those two people want different things and I don't know which one my market has.

@kestrel you can find that out before you buy. Post a test listing for a room in that neighborhood at both price points, furnished and unfurnished, and read who replies and what they ask. Costs nothing and you learn the tenant type in a week.

@lantern is that not a bit dishonest, listing a room you don't have?

@windlass yes, and it also poisons your own data because your reply rate depends on the photos, which you don't have either. Better version is to call three existing operators in the zip and ask what they furnish. Most will tell you. People like talking about their own houses.

Reading this thread as someone who mostly looks at paper, the thing I notice is that furniture is an operating decision that shows up as a capital number, and nobody in my world has a clean way to treat that. $7,000 of furniture isn't collateral and it isn't really an expense. It's just gone from the balance sheet in four years.

Buy the frames in metal, not particle board. I've built enough of both. The wood ones come apart at the joints once they've been moved twice and every turn is a chance for someone to move it. Metal frames survive tenants who drag furniture instead of lifting it.

We handle furnishing for a few co-living owners and the labor is what people forget. $7,000 of boxes is roughly two and a half days of assembly and hauling for two people. If you're paying for that it's another $900 to $1,200, and if you're doing it yourself that's your weekend and it's still a real cost. Price the assembly separately or your $7,000 is a $8,000 number.

Numbers as posted, with @sextant's life assumptions and @cobalt's labor added: outlay $8,100, annual carrying cost around $1,900, gross premium $5,040, net premium about $3,100 a year on four rooms.

The part I'd question is the $690 unfurnished comp. In a lot of markets unfurnished single rooms barely list, because the people who own furniture rent a whole apartment. If the unfurnished room comp is thin, your $105 spread is a guess dressed as a comp. What's your sample size on the $690, @tally? If it's under five filled listings I wouldn't build a $8,100 decision on it.