dscr-loan-midterm-rental): Maximize Income with Turnkey Properties

Furnished rentals occupy a sweet spot between traditional long-term rentals and short-term vacation rentals. They command premium rents—typically 30-75% above unfurnished equivalents—while avoiding many of the regulatory restrictions and management headaches of Airbnb-style short-term rentals.

For investors using DSCR (Debt Service Coverage Ratio) loans, furnished rentals are particularly attractive because the higher income directly strengthens your DSCR ratio, making qualification easier and cash flow stronger.

The Furnished Rental Spectrum

Furnished rentals serve different markets depending on lease length and target tenant:

Short-Term (1-29 nights)

Vacation rentals, Airbnb, VRBO
Highest per-night rates but most management intensive
Subject to short-term rental regulations
Not the focus of this guide (see our short-term rental DSCR content)

Medium-Term (30-180 days)

Traveling nurses, corporate relocations, insurance displacement housing
Strong income with less turnover than short-term
Generally avoids short-term rental regulations
The sweet spot for furnished rental DSCR investing

Extended Stay (6-12 months)

[Corporate housing](/blog/dscr-loan-corporate-housing), temporary work assignments, gap housing
More stable than medium-term with premium over unfurnished
Standard lease protections apply
Lower management intensity

Why Furnished Rentals Generate Higher Income

The Premium Breakdown

A 2-bedroom apartment example:

Unfurnished long-term rent: $1,800/month
Furnished medium-term rent: $2,800-$3,200/month
Premium: 56-78% above unfurnished

This premium exists because tenants are paying for:

Convenience (no moving furniture)
Flexibility (shorter commitments)
Turnkey living (everything provided from day one)
All-inclusive pricing (often includes utilities and internet)

DSCR Impact

That rental premium dramatically improves your DSCR:

Unfurnished scenario:

Rent: $1,800/month
PITIA: $1,500/month
DSCR: 1.20

Furnished scenario:

Rent: $3,000/month
PITIA: $1,500/month
DSCR: 2.00

The same property goes from barely qualifying to an exceptional DSCR simply by furnishing it and targeting the right tenant base.

Target Markets for Furnished Rentals

Traveling Healthcare Workers

The largest and most reliable furnished rental market:

Traveling nurses on 13-week assignments
Locum tenens physicians on temporary contracts
Allied health professionals (therapists, techs)
Demand exists near every hospital in America
Agencies help connect landlords with tenants
Reliable income—agencies often pay directly

Corporate Relocations

Employees in transition need furnished housing for 1-6 months:

New hires waiting to buy a home
Employees on temporary assignment
Executives in leadership transitions
Companies often pay rent directly (guaranteed income)

Insurance Displacement

When homes are damaged by fire, flood, or natural disaster, insurance companies place policyholders in temporary furnished housing:

Insurance pays rent directly
Stays range from 1-12 months
Demand spikes after natural disasters
Premium rates (insurance budgets are generous)

Other Demand Drivers

Divorce/separation (one party needs temporary housing)
Home renovation/construction (homeowners displaced during work)
Students on internships or rotations
Military temporary duty assignments
Film and entertainment crews on location

How DSCR Lenders Evaluate [Furnished Rental Income](/blog/furnished-vs-unfurnished-rental)

The Lender Perspective

Not all DSCR lenders treat furnished rental income the same way. Here's what you may encounter:

Best case: Lender accepts documented furnished rental income (lease agreements, booking history) and uses it for [DSCR calculation](/blog/how-to-calculate-dscr).

Middle case: Lender uses a blended rate between furnished and unfurnished comps.

Conservative case: Lender only uses unfurnished long-term rental comps (appraisal-based market rent).

Even in the conservative scenario, your actual cash flow benefits from the furnished premium—the lender is just being cautious in their underwriting.

Tips for Getting Furnished Income Recognized

Provide lease agreements or booking history showing furnished rental rates
Supply comparable listings of furnished rentals in the area (Furnished Finder, Airbnb 30+ day listings)
Have a property management company provide a rental analysis including furnished rates
Show platform reviews and booking history if you have it from similar properties
Work with lenders who specifically market to furnished rental investors

Setting Up a Furnished Rental

Furnishing Budget

Plan to spend $5,000-$15,000 per unit depending on size and quality level:

Bedroom ($1,500-$3,000 each):

Quality mattress and bed frame
Nightstands and lamps
Dresser with adequate storage
Hangers and closet organizers
Bedding sets (2 per bed for turnover)

Living Area ($1,500-$3,000):

Sofa and/or loveseat
Coffee table and end tables
TV with streaming capability
Lamps and basic decor
Bookshelves or storage

Kitchen ($1,000-$2,000):

Complete dish and cookware set
Utensils, cutting boards, and kitchen tools
Small appliances (coffee maker, toaster, blender)
Cleaning supplies starter kit

Bathroom ($300-$500 each):

Towel sets (2 per tenant)
Shower curtain and bath mat
Basic toiletries starter kit
Hair dryer

Other ($500-$1,500):

Washer/dryer (if not provided)
Iron and ironing board
Vacuum cleaner
Desk and chair (if space allows)
Welcome basket supplies

Quality Level Strategy

Economy furnished: Functional IKEA-style furniture, basic amenities. Works for traveling nurses and insurance displacement. Budget: $5,000-$7,000 per unit.

Mid-range: Better quality furniture, cohesive design, quality mattress. Good for corporate tenants. Budget: $8,000-$12,000 per unit.

Premium: Designer furniture, high-end appliances, luxury bedding. Corporate executives and high-income professionals. Budget: $12,000-$20,000 per unit.

Match your furnishing level to your target market and rent expectations.

Property Selection

Ideal Property Characteristics

Proximity to hospitals (traveling nurse demand)
Near business districts (corporate relocations)
In-unit washer/dryer (huge selling point for medium-term tenants)
Parking available (furnished tenants often have vehicles)
Pet-friendly potential (many traveling professionals have pets)
Good internet infrastructure (remote work capability)
Safe, walkable neighborhood (tenants unfamiliar with the area value this)

Markets With Strong Furnished Rental Demand

Cities with major hospital systems and medical centers
State capitals and government centers
Tech hubs with frequent relocations
Military base proximity
Areas prone to natural disasters (insurance displacement)
College towns with medical schools and teaching hospitals

Legal and Regulatory Considerations

Avoiding Short-Term Rental Restrictions

The key advantage of medium-term furnished rentals (30+ days): they typically avoid short-term rental regulations that restrict Airbnb-style properties.

However, verify locally:

Minimum lease length requirements
Business license requirements for furnished rentals
Zoning restrictions on transient housing
HOA rules on lease length minimums
Local tax obligations (some jurisdictions tax stays under 6 months as transient occupancy)

Lease Structure

Use a standard residential lease with a furnished addendum
Inventory all furnishings with photos (signed by tenant at move-in)
Include furniture replacement/damage clauses
Specify what's included in rent (utilities, internet, etc.)
Clearly state cleaning expectations

Insurance

Standard landlord insurance may not cover furnished rentals adequately:

Increase personal property coverage for furnishings
Consider requiring renters' insurance from tenants
Discuss furnished rental specifics with your insurance agent
Budget 10-20% more for insurance than unfurnished equivalent

Pros and Cons

Advantages

30-75% rental premium over unfurnished equivalents
Stronger DSCR ratios for loan qualification
Diversified tenant base across multiple industries
Less regulatory risk than short-term rentals (30+ day stays)
Higher quality tenants (professionals with income verification)
Direct-pay tenants (agencies and employers often pay rent directly)
Depreciation benefits on furnishings (5-7 year schedule)

Disadvantages

Upfront furnishing costs of $5,000-$15,000 per unit
Furniture wear and replacement (ongoing capital expense)
Higher turnover than traditional long-term rentals
More management for tenant turnovers and inventory management
Utility costs often included in rent (reduces net margin)
Seasonal demand fluctuations in some markets
Furnishing damage risk from tenants

Financial Modeling

Pro Forma Example: 3-Bedroom Furnished Rental

Income (Medium-Term Furnished at 90% occupancy):

Monthly furnished rent: $3,200
Annual gross income: $3,200 × 12 × 0.90 = $34,560

Expenses:

PITIA: $1,600/month ($19,200/year)
Utilities included in rent: $250/month ($3,000/year)
Property management (12%): $4,147/year
Furniture replacement reserve: $2,000/year
Turnover cleaning/supplies: $1,500/year
Maintenance: $2,000/year
Vacancy (built into 90% occupancy above)

Total expenses: $31,847/year Net cash flow: $2,713/year ($226/month) DSCR: $34,560 ÷ $19,200 = 1.80

Compare to unfurnished at $2,000/month:

Annual gross: $22,800 (at 95% occupancy)
DSCR: $22,800 ÷ $19,200 = 1.19

The furnished approach nearly doubles the DSCR while providing similar net cash flow after higher expenses.

Scaling Your Furnished Rental Portfolio

Systems for Scale

Standardize furniture packages for efficient procurement and replacement
Create turnover checklists and cleaning protocols
Build relationships with furniture suppliers for volume discounts
Develop templated listings for Furnished Finder, Airbnb (30+ day), and corporate housing platforms
Consider hiring a property manager specializing in furnished rentals

Platform Strategy

List your furnished rentals on:

Furnished Finder (traveling nurse focused)
Airbnb (30+ day minimum setting)
VRBO (30+ day stays)
Corporate housing platforms (CHBO, Blueground)
Facebook groups (traveling nurse and corporate housing groups)
Direct relationships with staffing agencies and corporate relocation companies

Getting Started

Learn DSCR fundamentals: Start with our [complete [DSCR loan guide](/blog/dscr-loan-for-beginners)](/blog/dscr-loan-guide)
Research your market: Identify furnished rental demand drivers in your target area
Analyze properties: Run numbers using both furnished and unfurnished scenarios
Get pre-approved: Find a DSCR lender who understands furnished rental income
Purchase and furnish: Buy the property and set it up for your target market
List and market: Get your furnished rental in front of the right tenants
Optimize and scale: Refine your approach and expand your portfolio

Furnished rentals represent one of the most effective strategies for maximizing income from investment properties. When paired with DSCR financing that rewards strong rental income, the furnished rental model creates a powerful wealth-building engine.

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Dscr Loan For Furnished Rental

Key Takeaways