Furnished vs unfurnished rental

Furnished vs unfurnished rental

One of the most critical issues that property owners or landlords have to deal with is whether they should lease their property out furnished or unfurnished. There is no ‘one’ solution that fits all scenarios. It all comes down to who the landlord’s target tenants are, how they want to use the property, the location and the current demand for properties in that area. We are going to explore furnished and unfurnished rental property distinctions.

Furnished property

Furnished rental property refers to a flat or house that is leased out with all the built-in and loose furniture.

Unfurnished property

Properties that are classified as unfurnished do not include furniture such as beds, couches or anything else.

Types of furnished properties

Before we carefully scrutinise the pros and cons of furnished or unfurnished rental properties, let’s look at the different ways a property is considered furnished:

  • Fully furnished and equipped – A fully furnished and equipped property is provided with whatever is necessary, including furnishings and accessories.
  • Fully furnished – the rental property has all the furniture needed.
  • Partly furnished – the property is to some extent or degree furnished.
  • Unfurnished – No furniture or appliances are provided, the tenants supply it all.

When is it good to have a furnished property?

When is it good to have a furnished property? Fully furnished rental properties are popular with tenants:

  • That are in search of short term leases.
  • Who travel frequently and need a place with all amenities.
  • That actually don’t own any furniture.

The advantages of a furnished property

There are several pros and benefits of a fully furnished rental property, including:

  1. Landlords can charge a premium for fully furnished properties.
  2. It saves tenants money as they don’t need to buy the furniture themselves.
  3. Letting a furnished propety allows you to increase depreciation deductions.

The disadvantages of a furnished property

Regardless of the apparent advantages of a fully furnished property you may find:

  1.  A higher turnover rate with tenants only staying for short periods of time.
  2. Setup and styling costs are additional expenses for the property owner.
  3. Every so often the landlord will need to meet the cost of updating and styling the property.
  4. The property owner will need to pay more leasing fees to their property manager each time it is leased to a new tenant.
  5. It is cumbersome and time consuming to maintain and monitor an inventory list of all the items in and on the property.

When is it good to have an unfurnished property?

Statistically speaking the vast majority of renters are looking to sign a long term leases. This huge group of renters mostly opt for unfurnished properties.

The advantages of an unfurnished property

  1. The property owner is not responsible for insuring tenants’ furniture or any other items they bring into the property.
  2. Landlords tend to have less concerns over wear and tear if the property is let unfurnished
  3. Renting an unfurnished apartment allows the tenant the freedom to personalise and decorate it any way they like.

The disadvantages of an unfurnished property

  1. Quite unlikely to attract higher paying transient tenants.
  2. It can frankly be annoying, time consuming and expensive for a tenant to furnish a property.

We hope we have given you some insight into the world of furnished and unfurnished rental properties.
As always when it comes to a decision of this magnitude we advise talking to your property manager. Property managers will advise on your individual property and whether they think you will do better with a furnished or unfurnished setup. It is imperative to know the market and the type of tenant your property will attract and how you should best position your property to appeal to them.

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