If you’re thinking about renting out your investment property, there are a few choices to be made before you release your property to the market. One of those decision is whether or not to rent it out as a furnished or unfurnished space.
Most property owners opt for unfurnished, but both options deserve consideration. It’s worth weighing up the pros and cons to decide with will work best for you.
A quick search of any property site will reveal a swathe of properties available for rent, the majority of which will be unfurnished. This is certainly the most popular option for most property owners, but what does it mean to offer your property unfurnished?
Unfurnished properties offer standard fixed items found in all properties. This includes cabinetry, window coverings, light coverings, and fixed appliances such as an oven or air conditioning unit. Some may even offer additional items such as washers and dryers and microwaves; however, they don’t offer everything that a person needs for everyday living.
The pros of offering your property unfurnished are many. First and foremost, you’re essentially offering a blank canvas for tenants to move into, bringing all of their personal items to create a “home”. This is what most tenants are looking for, which means it’s easy to meet your market.
Another major pro about offering your property unfurnished is that unfurnished properties are easier to manage. You don’t have to purchase, inventory and maintain a property full or furniture and other items. This also means you don’t have to go through lengthy entry and exit reports.
Before you get wrapped up in all the positives that an unfurnished rental offers, there are cons. One factor to consider is damage to your property. Tenants moving their own personal belongings in and out of your property can lead to a fair share of scuffs, scratches, dents and cracks. All this additional wear and tear can result in hefty maintenance and repair bills.
Unfurnished properties can draw attention to all the wrong aspects of your property. This is especially true if your fixtures and finishes have seen better days.
Furnished properties may be few and far between, but their merits are not to be overlooked. Before we get into the actual pros and cons, though, it’s important to understand exactly what furnished means.
Simply put, a furnished property offers everything a person would need for everyday living. This includes everything you’d find in an unfurnished property as well as things like couches, chairs, beds, soft furnishings, white goods, cutlery, crockery and even artwork.
One of the biggest pros of offering a furnished property is that you can charge higher rent. Since you’re offering more amenities than a standard property, you can increase the rent to cover the costs associated with maintaining that standard.
Another big benefit of offering a furnished property is the appeal it offers to a specific market. Whether it’s students or business travellers, there are tenants that simply require a furnished property. If your property is located in an area with a high population of people that are looking for a furnished property, it only makes sense to cater to your market.
An obvious cause for concern is the initial costs that come with offering a furnished property. You will have to pay to furnish your property, which can be a challenge. All of this will also need to be maintained, which is an additional regular cost that you will have to cover. This starts to add up if you’re not prepared for it.
Your target market may be looking for a furnished property, but these types of tenants are often also looking for short term rentals. Business travellers, students, etc are generally not planning on living in any given area for the long term. This means a higher turnover rate, which can be a hassle to deal with.
Which is better?
So! With all of the pros and cons laid out on the table, are furnished or unfurnished properties better? Unfortunately there is no clear answer here. It really depends on your investment property and your personal circumstances.
The best strategy for reaping the highest rewards from your investment property is to carefully consider your target market. Do your research to find out who is looking in the area where your property is located and find out what their biggest needs are. Then, style your property to suit that market. If you’re offering what the majority is looking for, you won’t have any issues finding just the right tenant.