Should You Offer Furnished Units at Your Community? Here’s What You Need to Know

If you have vacancies in your apartment community, that loss of revenue has a negative impact on your bottom line. Have you considered furnishing those units and repositioning them as corporate housing? If you’re willing to put in some extra work and have the hospitality experience necessary to properly market and manage those furnished units, the resulting revenue stream could be quite lucrative—up to twice the rent of a traditional unfurnished apartment, industry professionals say.

Furnished units are actually not common in either multifamily buildings or single-family rentals. According to an analysis prepared for Multi-Housing News by Zillow, between January 2024 and July 2024, just 6 percent of online listings in large multifamily buildings (those with 25 units or more) advertised that they had furnished units. For smaller buildings and single-family rentals, 8 percent of listings mentioned the availability of furnished units. That means that depending on the supply-and-demand fundamentals of your particular market, furnished units may present an opportunity—and give you the ability to differentiate your community from others.

“Furnished units allow multifamily developers and owners to offer a different amenity—one that delivers above-market rents, increasing their NOI,” said Sebastien Long, founder and CEO of Houston-based Lodgeur, which converts empty apartments and manages them to attract renters seeking furnished accommodations. “The Covid pandemic accelerated changes in how people live, work and travel. Today’s consumers place a value on convenience and flexibility, as well as asset-light lifestyles.”

If you’re thinking about adding furnished units to your portfolio, here are four things to consider.

Know your market. Not all markets are suitable for furnished units. Apartment operators need to understand the demand drivers in the market, such as whether there are local businesses relocating new employees to the area. Is there an affluent demographic with the disposable income to spend on the convenience of furnished apartments? 

“If you’re in a rural area with no employment centers, hospitals or colleges, it may not be wise,” explained Josue Garza, president of property management for Lynd in San Antonio. “The location needs to be well-located, have connectivity to major employment corridors and a certain element of walkability or support services if the community doesn’t have proximity to grocery stores, schools, healthcare, etc.”

At The Station at Newtown Square, a 250-unit community just outside Philadelphia, Petrucci Residential offers 42 furnished corporate suites. Elisha Wolstenholme, Petrucci’s executive vice president of multifamily housing, said the units appeal to corporate executives, professional athletes and even snowbirds, such as Florida residents who spend the summer visiting family in the area.

“It’s lucrative, but it’s seasonal,” she said. “We have noticed more vacancy with our corporate units over the winter months. You need to budget accordingly.”

Determine the type of product you will offer. The product depends upon not only the market and your target renter but on the specific community as well. Furnished luxury units in an older Class B community are probably not a good fit.

“Have a cohesive offering,” said Garza. “You don’t want an A luxury property with C-class furniture or vice versa. The furniture and the décor must be appropriate for the submarket and your target demographic.”

Korman Communities offers high-end furnishings in its corporate suites, according to Lea Anne Welsh, Korman’s chief operating officer and president of its AVE brand. “We buy designer furniture, and we provide a linen package with towels, bedding, an espresso machine, toaster and pots and pans,” she said. “We partner with Crate and Barrel on the highest-level supplies and furnishings.” The company also includes cable, internet and all utilities in its rate for furnished apartments. That luxury experience allows Korman to rent furnished units for two times the regular apartment rent.

Ensure staff has the requisite experience. If you’re offering furnished units, you are in the hospitality business—you are basically running a hotel within your apartment community. As a result, you need to manage and market the furnished units differently than the others. For example, Welsh said that ILS sites do not drive traffic for furnished units, so AVE partners with Airbnb to market units and also uses a booking engine on its website.

“It’s a different tech and skill stack,” Long explained. “You need the right software to manage online distribution, reservations, guest communications, pricing, screening, housekeeping and operations.”

For those lacking staff with hospitality experience or operating in markets with which they are not familiar, outsourcing the management of furnished units may be wise.

Have a plan to avoid vacancies. Operators of furnished apartments say that keeping units occupied is key to their success.

“Every day is a battle to reach a break-even point,” Garza added. “You can be completely full one day and nearly empty the next, and it still costs the same to operate and offer all of the services.”

Wolstenholme recommends building a network to market corporate housing units to local businesses. “It is beneficial if you have a director at the executive level making connections,” she added.

Make sure your marketing plan includes detailed strategies to keep furnished units occupied. Leverage existing relationships to ensure that communities offering furnished units have visibility at hospitals, colleges, chamber of commerce events and other locations your target renter frequents.

“Furnished apartment suites can add extra revenue over market rate apartments if they remain occupied 75 percent,” Wolstenholme said.