A lot of property investors wonder if by furnishing their unit, they will generate more rental income. This blog covers three important considerations for investors weighing the option of renting their property furnished.
- More furnishings mean more liability. Put simply, if your renter gets hurt based on your furniture being faulty, you could be liable. For example,
if a tenant’s child is playing on your table and falls; you may be suddenly find yourself facing a liability claim whereas if the child fell on
a table owned by tenant, you wouldn’t be at risk of liability.
- More furnishings mean more maintenance. As an investor, you will be responsible for maintaining the property, including both the unit and the furniture
you’ve provided. Colorado law does not clearly define what is considered personal property, therefore this should be carefully considered as it
could mean more work on the side of the investor or the investor’s property manager.
- More furnishings don’t necessarily mean more income. Many investors think they can generate more revenue by renting out their furnished unit as a short-term
rental like Airbnb. While this can be lucrative, it’s imperative that the investor check their community bylaws and HOA to ensure their property
allows short-term rentals. Colorado regulation has started to buckle down on short-term rentals in multifamily communities like condos and townhomes
and even single-family communities due to resident backlash. Neighbors don’t like having short-term renters next door and as a result, many communities
have begun outlawing leases less than 30 or 60 days. This has been done with rental real estate in some Broomfield and Erie areas.
QUESTION: If a tenant is injured in my unfurnished unit due to faulty furniture, am I liable?
ANSWER: No. Only if you provide the furniture do you risk being liable for tenant injury in this case.