When you have a new rental property, you may debate whether it would be better to provide a furnished unit. With a furnished rental, you need to spend time decorating and choosing the appliances and furniture with care. Not only will it require an additional budget, but you will also need to put more effort into staging your rental space to attract more potential tenants.
Some renters find bringing in their own furniture a hassle and would much prefer the convenience of a pre-furnished rental space. To these renters, the amenities that come with the house are very important.
Is it better to furnish your rental home, then? Let us review the pros and cons and the considerations to take before deciding.
How Furnished Homes Look
Renters expect furnished rentals to include the following:
- Dining areas will need a dining table and chairs.
- Kitchens must contain important appliances, such as a stove, refrigerator, and oven. Additional appliances can also include a microwave, coffee maker, and toaster. Cooking utensils and dishware must also be provided.
- Living rooms need to have a sofa, table, and TV set.
- Bedrooms must have a bed, cabinet, and a nightstand.
Other items can also be displayed depending on the landlord. The rental space can contain lamps, decorative jars, and more stylish pieces around the home.
Type of Renters Attracted to Furnished Units
Many renters prefer furnished rental units, including young professionals, travelers, students, and remote workers. Students and people who just entered the working world won’t have a lot of money to pay for new furniture and appliances, so a ready-to-move-in furnished living space suits them.
Other prospective renters can include travelers, remote workers, or those planning to move to a certain neighborhood and testing the waters by renting.
Savvy travelers know that staying in furnished units can lower their daily expenses, especially if they’re traveling for short periods of time. Hotel prices can be costly, so it pays to find an alternative. In addition, furnished units also help renters save fees since they won’t be hauling a lot of their belongings.
Advantages Offered by Furnished Rentals
Here are some of the upsides of presenting a furnished unit:
Potentially Higher Income For The Landlord
When you furnish your rentals, you can assign a higher rental rate since it’s a ready-to-move-in space. You’ll still need to make the fee competitive so it’s not too high for your target renters. However, you should also compute the cost of the furnishings to avoid a loss. Make sure to properly calculate your projected profit.
Allowed To Request Higher Security Deposits From Tenants
Since the possibility of damage is higher with a furnished unit, it will be reasonable to collect a high security deposit from tenants. More protection is needed for your furniture and appliances.
However, damage caused by normal wear and tear must be covered by the landlord.
Reduced Property Damage Due To Move-In
Many mishaps can happen as a renter is moving in. Floors and walls can get scratched while bulky items are being transferred. But if your rental is completely furnished, the potential for damage decreases. You won’t have to deal with scuff marks and stains here and there.
Wider Market Demographic
Furnished rentals are easy to successfully advertise since most people want to save on costs and prefer the convenience of moving in easily. You can target different markets, such as travelers, young professionals, students, and businessmen staying in town for a few weeks or months.
Disadvantages of Furnished Rentals
Below are some of the downsides of providing a furnished unit:
Requires A Sizable Budget From A Landlord
Investing in a furnished rental can cost a significant amount. Landlords will need to oversee its maintenance through regular property inspections. It’s recommended to create specific clauses in the lease agreement to address preventive maintenance issues.
Tends To Attract Short-Term Tenants
In general, furnished units are set up for renters looking for a temporary stay. This requires landlords to market the rental space often. Students will need to leave during school breaks, travelers will need to return to their homes, and young professionals will seek more comfortable housing when they get higher pay.
Things to Consider Before Furnishing Your Rental Property
To ensure you get the optimal ROI, perform this assessment before deciding to furnish your unit.
Check Your Rental Location
Is your property near a university, business district, or popular city landmarks? This informs you of the best demographic to target. When creating a rental listing, make sure to mention the location accessibility in your ad.
Evaluate Potential Market Demographic
Look around your neighborhood. What type of renters are living in your area? Is the rental demand high? You need a solid tenant base to ensure your property investment is profitable. Otherwise, you might overinvest in furnishing your rental.
Right Market Conditions
Always do a proper calculation of the investment costs. Will your prospective renters be able to afford the rental fee if you furnish your rental unit? Make sure that the rental pricing remains competitive.
Bottom Line
Although furnishing your rental unit can lead to earning a higher income, it is best to take time to review the factors that affect your investment, like your rental location.
If you need more help deciding how to manage your rental property, contact JTS Property Management! Our team of professionals is ready to assist.
