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Furnished suites generate more revenue by Downtown Suites Ltd.

Blog by Ian Watt | November 16th, 2006

Urban Myth #1: Furnished suites generate more revenue by Downtown Suites Ltd.

Many clients have asked me the pros and cons of furnished vs. unfurnished rental of their property,

hopefully the following will assist in answering some of these questions.

At Downtown Suites, we have found the reverse to be the case and have recommended to our clients that

they only rent on an unfurnished basis.

Downtown Suites Ltd is not adding any more furnished suites to its portfolio.

The factors that have led to this decision are as follows:


Require a capital investment of approximately $15k on average to outfit a suite. No, your old basement furniture will not do!

Annual replacement of linens, regular carpet cleaning costs and painting touch up of the suite

There is a lot of competition!

Expect at least 30-40% vacancy.

Other owners do not like their residence building being a "hotel".

Many buildings now require a move-in fee even if it is only a suitcase being moved!

Many buildings have a minimum tenancy period, i.e. 3-6 months

Full utility package including telephone, cable, internet, heat and light must be paid by owner whether tenant occupied or not.

Extra cleaning costs. The suite has to be cleaned after every move out - this is the owners responsibility (have you ever been to a hotel and asked to clean up after yourself?!) Cleaners are expensive minimum $40 per hour now for a team of two.

Many guests will require weekly cleans at owners cost

Almost no screening, basically all that is required is a valid credit card for a $500 hold to be put on it. Of course with credit card fraud being so abundant who knows if it really is their card!

Further to the above, almost all of our problem tenants have been in furnished situations.

Charge back of credit card discount fee of 3% per transaction.

Commission charged by Downtown Suites Ltd is 20% of gross rent (Remember there is much more turn over, reservation inquiries, move in procedures and customer service than with a conventional rental). Unfurnished:

One year lease, 100% occupancy

Full credit, employment and reference check

Commission is 8% of gross rent

Less wear and tear

Just do the math and you will see that it is much less trouble and less worry to rent unfurnished and the bottom line will probably be better too!

Urban Myth #1: Furnished suites generate more revenue by Downtown Suites Ltd.

#247-515 West Fender Street, Vancouver, BC, V6B 6H5

Tel: 604-694-8801; Fax: 604-682-5634