Deciding between furnished or unfurnished rentals

Are you a property owner considering renting out your space but unsure whether to provide it furnished or unfurnished? The answer is not as straightforward as you might think. Your decision will be primarily influenced by various factors, including the potential tenants you aim to attract and each option's advantages and disadvantages.

An unfurnished rental doesn't necessarily mean a bare space. Typically, it includes essential fixtures and appliances, but beyond that, tenants would need to bring their own furniture. This option requires less initial investment but may deter potential tenants not keen on furnishing the place themselves.

On the other hand, a furnished rental comes equipped with all the necessary furniture, reducing the burden on the tenant. As a landlord, you'll be responsible for maintaining this furniture and keeping track of its condition using an inventory. This option can appeal to certain tenants but also means more responsibility and potential costs for you.

The type of rental you opt for can significantly impact the kind of tenants you attract. Families, for instance, often prefer unfurnished properties as they typically have their own furniture or specific needs not met by standard furnishings.

Conversely, furnished rentals are popular among overseas individuals or those in transitional life phases who may not possess much furniture. This group appreciates the convenience of furnished spaces, even if it comes at a slightly higher cost.

Higher rent: Landlords often charge 15% to 20% more for a furnished rental than they might for an unfurnished one. This extra income might be used, in part, for insurance on the furnishing you provide and for upgrading the furnishings when something wears out.

Attract different demographics: Furnished properties may attract students and young professionals who are usually looking to let for shorter periods and enjoy renting a property with some furniture supplied.

Money saving: If your property already has furniture, you’ll save money renting it out as is rather than paying to remove the furniture. The furnishings can be re-used for a new tenancy once the old one ends, so you’ll have them for the long term.

Faster occupancy: Generally, furnished properties tend to be rented out faster. In cities, in particular, they tend to be a bit more popular. If you’re looking to fill a property fast, offering furnishings may help.

Higher turnover: Tenants in furnished properties usually have fewer large personal possessions, making it easier for them to move. This could result in a higher turnover than there would be in an unfurnished property.

Additional costs: If you don’t already have furniture, there’s the cost of acquiring it. Once the furniture is in place, you’ll be responsible for fixing or replacing it when normal wear and tear occurs. This may be tax deductible, but it’ll still cost, so make sure you have a budget for furniture upkeep and consider taking out insurance.

Inventory management: When you take on a new tenant, it’ll take a little more admin if you’re furnished. You’ll want to walk through the property and take note of what items are in the flat and what condition they are in. Having this inventory and getting a tenant’s sign-off will help you should a tenant damage anything beyond the usual wear and tear.