The main pro of letting out furnished properties is that it could yield higher rent whereas renting out unfurnished properties might attract tenants looking to stay longer and make the space feel like home.
As a landlord, you might be battling with the decision between letting out your property furnished or unfurnished.
The truth is, that this decision is an important one. It can affect how much rent you charge, how long tenants stay in your property and impact the amount of maintenance work you need to do.
Here, we’ll talk through the pros and cons, helping you make the right decision for your property.
Furnished vs Unfurnished Rentals: What’s The Difference?
Before looking at the advantages and disadvantages of each one, it’s probably worth clarifying what we mean by “furnished” and “unfurnished”.
Furnished properties come with furniture like sofas, beds, tables, chairs and wardrobes. Some landlords might also include soft furnishings like lamps, rugs and kitchen utensils.
Unfurnished properties on the other hand will include essentials like ovens, washing machines and hobs, but won’t come with any furniture. This will be down to the tenant to source, buy and fill the space with.
There are also part-furnished properties, which include items like beds and sofas, but may not come with everything they need in the home.
The Pros and Cons of Furnished Rentals
Fully furnishing your rental property can be a great way to make your offering more appealing to tenants, but it does come with some pros and cons.
Advantages of Furnished Rentals
- Attract higher rental yield: Furnished properties are more appealing, especially in inner London where finding and transporting furniture can be a headache. This means they can usually attract tenants that are willing to pay more for the convenience.
- Get filled quicker: Tenants without furniture like young professionals, students or overseas renters, can move in quicker, meaning you are less like to have gaps.
- Tax advantages: Landlords can claim taxable expenses on replacing and maintaining worn-out furniture and appliances.
- A place to store old furniture: If the property already has furniture, or you have some that you don’t want to get rid of, leaving it in the property can be a great way to save on storage costs.
Disadvantages of Furnished Rentals
- Higher costs: Furnishing a property can be expensive, especially if you want to buy high quality items that you don’t need to replace regularly.
- More maintenance: Furniture will wear out over time and may need repairing or replacing. Maintaining a property is hard enough as it is, and this adds another elements.
- Inventory checks: You’ll need to do a full inventory check, including noting down any damages on the furniture to avoid tenant disputes at the end of the tenancy.
- Better for short-term renters: Short term renters prefer furnished properties, which may mean a higher turnover.
- More insurance: You’ll need extra insurance to cover the furniture too, making it more expensive.
The Pros and Cons of Unfurnished Rentals
Unfurnished rentals are a popular choice for landlords, especially as it means they don’t need to buy any extra items.
Advantages of Unfurnished Rentals
- Lower initial costs: There’s no need to buy furniture, saving you costs upfront.
- Attracts long-term tenants: Tenants with their own furniture are more likely to stay longer, so you are less likely to have to start the letting process again.
- Easier maintenance: With less items to manage, maintenance is less time-consuming and expensive.
- Lower insurance costs: Unfurnished properties need less insurance coverage as the tenants come with their own furniture.
- Council tax relief: If there are vacant periods, unfurnished properties may be eligible for council tax relief for a short time.
Disadvantages of Unfurnished Rentals
- Lower rent potential: Unfurnished properties generally have lower monthly rents than furnished ones.
- Less appeal: In areas that are popular with students or corporate workers, unfurnished properties are generally less appealing. This might make it harder to find tenants and leave the property vacant for longer.
Which Tenants Are You Trying To Attract?
To make the decision, you want to start by thinking about who your target audience is. That can help you figure out whether an unfurnished or furnished offering is right for your property.
Furnished rentals tend to appeal to:
- Young professionals.
- Companies looking for staff accommodation.
- International renters.
- Short-term tenants, like students.
Unfurnished rentals tend to appeal to:
- Families looking for a long-term home.
- Tenants with their own furniture, like older people.
Whilst furnished rentals definitely appeal to a wider base, it’s also worth weighing up what type of tenants you want in your property.
Consider Property Location
One more thing that you should think about is where (and what type) your property is.
For example, if you own a flat in a block in Canary Wharf, you’re likely to appeal more to city workers. However, if you have a terraced house in a London suburb, your property will be better suited to families.
Knowing who your property is most likely to appeal to is important because it can help you make the right decision with them in mind. If your prime audience is likely to want furnishings, then it’s probably smart to invest in them.
Get To Know The Legals
If you are planning to furnish your property, remember the items have to comply with legal standards. For example, they must be safe to use and fire resistant to avoid any danger.
Whilst you will be able to claim taxable expenses for upkeep, you won’t be able to claim them for buying the initial furniture, so bare that in mind when deciding too.
Part-Furnished: A Middle Ground
If you aren’t sure between a furnished or unfurnished property, a part-furnished one can be a good compromise.
Providing items like beds, wardrobes or sofas while leaving other spaces open keeps things easy and flexible.
Choosing What’s Best For Your Rental Property
The right choice between furnishing your rental property or leaving it unfurnished depends on your target tenants, location and finances.
Furnished rentals can generate higher income but come with more responsibilities, while unfurnished rentals can attract long-term tenants and need less maintenance.
If you need some more help and guidance to make the decision, contact the property management team at J Property Management on 020 3105 5898 today.
