“Do you rent your investment property furnished or unfurnished?” is something we get asked often. There is no right or wrong answer, it largely depends on location, demand and the target market.
Offering a furnished rental property to tenants can demand higher rental yields, however this can easily be offset by high tenant turnover.
When furnished properties can work:
Furnished apartments are a perfect solution for short term tenancies, for example students, families on holiday, professionals who move to an area while they complete a job, or someone going through a relationship breakdown. These types of tenants are typically looking for a furnished property to suit their transient lifestyles.
The main benefit of furnishing your rental property is that it can provide additional returns above the standard rent. It can also provide flexibility in moving your price with the market. People may be willing to pay a higher rent for the convenience of moving in to a furnished place.
Negatives & Risks
Vacancy & Leasing Fees
In general, unfurnished properties attract longer term leases with minimal vacancy and wear and tear. With a furnished property, you may need to factor in a higher tenancy turnover, which means an increased vacancy period, cost in leasing fees, advertising and marketing.
Purchasing & Maintaining Furniture
If you furnish your property, be mindful that you will need to replace items promptly if they’re not working properly. Furnished properties require a higher level of maintenance and attention.
For every person hunting for a furnished, well-presented property, there are more who need a place for the long term.
Most good quality, long term tenants with references have already been renting and accumulated their own furniture, so a furnished property simply won’t appeal to them.
Generally speaking and in our experience, unfurnished properties attract longer term tenants, minimal vacancy and reduced wear and tear.