A simple guide to creating an overall furnishings budget for your short term rental (or new home).
When planning for your short term rental, one element that many are unsure how to prepare for is "How do I appropriately budget for furnishings, art, and accessories?" Some throw a random number based on their gut. Some have previous investments to use as a basis. Moreover, others don't consider it and spend at will. Whichever way you prefer, we hope this article will help give a little professional guidance and direction to help you come to a more definitive number.
Here at The Social Home, we work out the budget right from the beginning of the project - before we even start designing. We don't want to show you Vintage Champagne when you were aiming for a small batch IPA. The budget is our roadmap. It directs which lines we source from and helps set the goals for the project right from the start.
Step 1: Walk Your Space
For this exercise, we have created a floor plan for a two bedroom home with an outdoor patio space. You can sketch out the layout of your rental and do the same.
In your head, take a walk through your location from the entry door and list the main living areas - Entry, Powder Room, Living Room, Kitchen, Master Bedroom, Master Bathroom, Guest Bedroom, Guest Bathroom, Laundry Room, and Patio. (Do not forget about the smaller spaces. You want to put a number to everything.)
Step 2: Create Your Basic Outline
At The Social Home, we use Microsoft Excel (old school but we love it ) to create our Furnishings Budget. In whichever program you prefer, list out each room and the standard items you will need in each and give them a budget number that you would like to be around. If you are unsure of where these numbers should be at, go to the website of a manufacturer that you trust and do a little research. Costs can range from the extreme low end to the extreme high end. Be realistic! Do not give yourself a $300 Living Room sectional budget. If you want your furnishings to last, make sure you are sourcing from a quality vendor. As noted in our blog "Standing Out From the Crowd," you want to look for pieces that say "Contract Grade." These pieces were designed and built for the hospitality environment.
(Side note, your budget numbers are not ironclad - if you swap out a table lamp with a floor lamp, in the end, this is fine.)
A few of our Favorite Vendors:
Step 3: Pulling It All Together
Next, think about the art, accessories, drapery, and rugs for each space. These are the items which will give life to the room and enhance the design aesthetic. When doing our preliminary budgets, TSH typically gives some of these numbers a general "allowance." Go high. These numbers will also cover your incidentals and unknowns. It never ceases to amaze us how easily a small space can suck up accessories. You may have purchased $1500 in drapery, throw pillows and decor but once you put it all into place, it can feel like you have barely spent anything at all. We have been on installations where we have gone back and forth to various stores 3 or 4 times until the project feels completed.
A few of our Favorite Vendors:
Step 4: Taxes, Shipping, and Installation
You should now have your preliminary bottom line with all of your main furniture pieces, art, and accessories budgeted out. The last items we will add to your budget will cover the unknown.
Taxes: As tax law varies significantly from state to state, research your local tax rate. Some online retailers only charge taxes if shipping to individual states. Others do not charge tax at all. Depending on where the project is located, we put in the local rate to cover ourselves.
Shipping: As a general rule of thumb, we add 10% to cover shipping costs. This number can vary significantly as some manufacturers offer free shipping over "X" amount of dollars while others can be up to 20% of the order. You will rarely never have any shipping costs at all.
Installation: This one is not always necessary. Do you have a space allocated to receive your goods and resources to unbox, check for damage and install? Alternatively, do you prefer to send everything to a third-party warehouse and have them do all of the receiving, damage inspections and then ultimately provide a single installation? We prefer to send to a trusted partnered warehouse. Not only do they do all of the "heavy lifting"; they will also file any shipping claims when pieces come in damaged. We have never had a project without at least one item coming in broken. It is merely the law of averages.
Step 5: Work The Numbers
Did you get to your bottom line and were shocked when your number was twice what you wanted to spend? Go back through and work your numbers. What is standing out as too high? Conversely, have you magically only budgeted $10,000 for your entire two-bedroom 1500 square foot home? Did you put enough into each of the rooms?
If you are near the budget, you had in your head, great! You now have a roadmap for your furnishings.
We have years of experience budgeting projects large and small. When you are first working through the numbers, it can seem a little daunting but follow these necessary steps, and you will be well on your way.
Would you like a little help? Join our mailing list, and we will send you an editable Excel File for you to create your own Furnishings Budget. Please be a Good Human. Our budget is to help you and you alone. Do not reproduce, sell to anyone, or use other than to help you create a budget for your rental or new home. Karma is real folks.
Do you like this post? Are there any topics you would like The Social Home to cover. Please send us an email, and we would be happy to consider your issue.