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Renting Your Home – Furnished or Unfurnished?
So you’re looking to rent out your home. One of the early decisions you’ll be faced with, and a big factor in determining the kind of tenants you’ll attract is whether to rent your home furnished or unfurnished. Contrary to popular belief, an unfurnished home isn’t completely empty; even unfurnished properties are expected to contain kitchen appliances, bathroom utilities, carpets, curtains and such. Furnished properties, however, are fully equipped with everything a tenant could want: beds, tables, chairs, wardrobes, sofas and even cutlery (on top of everything included in an unfurnished property). No matter how you choose to outfit your property, there are variables to consider and it’s worth weighing up your unique circumstances before settling on one style of property over another.
Especially beneficial to working professionals, international tenants and people not looking to settle down, furnished properties don’t require tenants to acquire or struggle with moving in a whole property’s worth of furniture: it’s all present and accounted for. Busy and convenience-focused tenants will happily pay more for your property if it comes fully-furnished, and you may find that-depending on the specific location-it generates more interest too. You can expect to charge at least 20% more per month for a furnished property than an unfurnished one; when you consider that tenants won’t be expecting high-end furniture, it won’t be long before the cost of furnishing a property is recouped and any extra income is purely profit.
As a landlord for a furnished property, there will be more responsibility on your hands. It’s generally advised that you take out contents insurance on the property’s furnishings in case of damage, theft or malfunction of any kind; a portable appliance test to ensure the safety of any electrical items is a good idea too as well as electrical periodic inspection reports when required. Additionally, you must also ensure that all furniture conforms to the fire safety standards and bears the label that confirms it.
With a fully furnished property also comes the responsibility of making sure that all the furniture is functioning and in good condition. While some of the cost of replacing utensils, appliances and furnishings is tax-deductible, you’ll still have to locate and pay for replacements.
As mentioned, short-term tenants are the typical occupants of furnished properties. This, unfortunately, means that you’ll regularly be locating and managing new tenants as the old ones move away-a stressful and never completely risk-free process. There’s no telling how reliable and trustworthy a new tenant will be; a high turnover rate means that you’ll likely encounter a difficult tenant or two among the upstanding ones.
Ultimately, a furnished property involves an upfront investment, it puts more responsibility on you (in terms of replacing, maintaining and monitoring the safety of your furniture) and it also means that you’ll regularly have to repeat the process of welcoming in new tenants (due to the short-term nature of furnished properties). If you’re prepared to take on these higher demands, you’ll be rewarded with a higher income and (potentially) a much more desirable property.
Particularly of interest to families, young couples and anyone looking to settle down, unfurnished properties offer a superb blank canvas for people who want to express their own aesthetic sensibilities and stylistic taste. Unfurnished properties obviously require less of upfront time and money investment, meaning that you’ll be profiting sooner. They’re also less of a responsibility: you don’t have to be concerned with insuring and/or replacing furniture and utensils except for the basic appliances (kitchen/bathroom essentials, as mentioned earlier). Of course, this smaller upfront cost and reduction in responsibility comes with the caveat of reduced potential for earning each month in comparison to fully furnished properties.
The upsides don’t end at reduced responsibility, however. Not only are tenants who tend to prefer unfurnished properties more inclined to stay for longer periods, but the act of outfitting the property with their furniture will make them feel settled and even more likely to stay for an extended period. This stability is perfect for you as a landlord and means that you won’t have to deal with the arduous process of finding and moving in new tenants every few months.
An often unsung benefit to renting out an unfurnished property is the ease of which it can be cleared out. If, for example, you wanted to stop renting and put the property up for sale, clearing out and disposing of the property’s contents would pose far less of an obstacle if the last tenants took their furniture with them. Although, signs of wear and the knowledge of a property being an ex-rental might make buyers cautious. In these circumstances, it’d be smart to consider contacting a residential or commercial property buying firm like LDN Properties. With no personal stake in the house’s tenant history, these companies will buy an ex-rental directly without fuss, hassle or hidden fees.
In the end, whether to furnish your property or leave it unfurnished comes down to how much time and money you’ve got to invest, how hands-on you are as a landlord and the types of tenants you’re looking to attract. Engaged and active landlords who are happy keeping up with their property’s needs will cope fine with the higher demands of a furnished property and will see a greater monthly income as a result. On the other hand, busier landlords who prefer a passive approach to maintaining their properties might want to consider leaving their rental homes unfurnished. As always, every case is different and no option is definitively better than the other; the choice is in your hands.Follow me on social media for more!
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