Should I Rent My House Furnished?

New landlords may be trying to decide whether to invest in furnishing their rental units. As more niche markets have developed and want different things, it can be overwhelming to think about what to offer renters when it comes to furnished or unfurnished properties.

In the past, it was sufficient for investment property owners to provide free utilities. But with the plethora of services available and evolving needs of the industry, as a landlord, you want to offer a lot to tenants to attract them to your investment property.

Tenants find renting out furnished rental properties convenient, so more landlords decide to provide furniture for their units. It’s less costly for the renters to move since they don’t have to carry the bulk of their belongings and all of their own furniture, like beds, couches, and dressers. Renting your property furnished also attracts short-term residents so having essential items on hand makes the space more comfortable.

But is it more cost-effective for landlords to rent out a furnished or unfurnished property?

How Furnished Units Look to a Landlord

When we talk about renting out furnished or semi-furnished rentals, we expect that all furniture is in place. However, the landlord still has the last say over what items to issue. In general, a furnished rental appears like the following:

● A kitchen is equipped with dishware, cooking utensils, and proper appliances. These appliances typically include a stove, oven, and refrigerator. Many unfurnished rental properties come with appliances as well.
● Bedrooms typically contain beds, nightstands, and dressers
● The living room contains a sofa and coffee table
● The bathroom displays a shower curtain and floor mat
● The dining area comes with tables and chairs

Target Market for Furnished Homes

A fully furnished unit can appeal to several demographics, such as tourists, students, and businesspeople temporarily staying in a certain area. Furnished rentals are often preferable compared to hotel rooms since they cost less, especially if you’re looking to stay for a long-time frame but not necessarily more than a year.

Unlike unfurnished ones, with furnished rental properties, residents are no longer pressured to save up and budget for furniture, so it can lead to more savings. It’s also hassle-free to transfer to a furnished apartment or house. Typically, the target market prioritizes convenience. Hence, they seek to rent a furnished rental.

What are the Benefits of Furnished Apartments for Landlords?

1. You can increase your rental income for furnished homes

Given that renters will be able to move into a fully furnished property faster than into an unfurnished one, one of the benefits of this choice is that you can set the rental price higher for a furnished apartment or home. Convenience is taken into account but before assigning a rate, it’s always best to perform research and check out the prices of similar rental properties around your neighborhood.

It’s vital that your rental income can cover for the furniture and appliances you’re providing but don’t get carried away and price it too high. You might need to do a trial and error to determine the right rent cost to charge to maximize your rental income.

2. You can protect your investment from the damage caused by bulky furniture when a tenant moves in

One of the benefits of renting out fully furnished properties is that they’re not subjected to a lot of damage during the first day a tenant transfers. There’s no heavy furniture to lug around and rearrange so any scratches, marks, and dents are avoided, as they may not be when the space is unfurnished. You won’t need to hire someone to retouch the paint or remove the scuff marks on your flooring.

3. It’s easy for you to focus on a niche

Since fully furnished rentals attract particular segments, you’ll find it easy to serve your preferred demographic that with an unfurnished space.

Figure out which demographic you aim to attract. Is it students, tourists, or business people? Knowing which group to target makes it easy to create ads and develop a marketing plan.

4. It’s acceptable to request a higher security deposit

With a furnished or semi-furnished unit, a landlord needs to protect them more than they would an unfurnished rental. They can ask the tenants to hand in a higher security deposit. Landlords can only deduct for damaged items beyond wear and tear. Otherwise, they need to pay for the repair or replacement of an item. Writing this down in the lease agreement minimizes future repair and maintenance disputes.

5. You can stage your property which offers more appeal to potential tenants

When you have the option to furnish your rental space, it helps you amplify your visuals to attract more prospective residents. Capturing photos of staged homes and adding them in your ads engages more interest than photos of an unfurnished space.

What are the Disadvantages of Furnished Homes for Landlords?

1. A furnished property carries risk as an investment

When you commit to creating a furnished apartment or house, the risk of exposure to damage is higher than it would be for unfurnished properties. It requires you to perform regular property inspections and preventive maintenance so the property is in a superb state. Inspections and maintenance will help to lower the risk. Another way to reduce it is by asking for a substantial security deposit.

2. Furnished homes attract short-term tenants

Typically, furnished rentals appeal to those looking to rent for a short period, while long-term tenants don't tend to mind unfurnished properties. Landlords must intensify their marketing efforts to avoid vacant rental spaces when it is not unfurnished.

3. Some tenants may request to remove some items

Not every tenant will want the furnishings you provide in the rental. The tenant may request not to keep some and you’ll need to find a place to store it.

It may also require you to rent an additional storage room where the furniture can be kept, which means additional paying an additional cost that would not be necessary with an unfurnished rental.

Is Furnishing Your Rental the Right Decision?

Before deciding to rent out your property furnished, you need to evaluate your location first. Is the rental situated in a college town, local attractions, or a business district? This makes it easy for you to work out which demographics to attract.

Ensure that the rental rate you charge is reasonable given the features you provide before you invest in supplying the unit with furniture and appliances. You also need to match the furnishings based on the demographic you plan to attract.

Bottom Line

Furnished and unfurnished rentals both have their strengths and weaknesses. Furnished homes offer plenty of benefits, such as increased rental prices, reduced property damage upon move-in, and more focus on who to serve.

But it also has drawbacks, like more risk exposure from repetitive use of furnishings and attracting short-term tenants. In the end, you need to decide what wins on furnished or unfurnished rentals depending on your location, local rental market, the potential cost, and potential tenants.

Are you looking for a trusted property manager to handle your rental space? If yes, contact McKenna & Vane Property Management today!