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What is the Difference?
A furnished property is a property which is listed and rented with items included. Usually suited to tenants who are looking for a short to medium-term tenancy, from 6 months to 24 months. Therefore, these tenants are happier to pay some additional rent to get a property which is ready to live in, rather than investing in their own items.
An unfurnished property is a property that is listed and rented almost entirely empty. These properties are perfect for tenants looking for a long-term tenancy, from 24 months and beyond. This allows the tenant to save a little additional money to build up their own collection of furniture and furnishings.
If a landlord decides to opt for an unfurnished rental property, there are still several things to consider. A tenant is unlikely to want to invest in the interior of a property that they do not own. Therefore, the landlord will usually include the basics and is liable for the maintenance or repairs required. Usually, the tenants looking to rent an unfurnished property are willing to invest in larger items. This gives them the ability to build up their personal homeware collection.
When choosing a furnished property, there are often slight differences in what is included. Some landlords prefer to include only essential white goods and furniture. This is best for tenants who are looking to add a personal touch to their rental property. However, others will include furnishings, decorations, and additional kitchenware. This is typically the best option for tenants who are looking for a short to medium-term rental or have relocated for work, as they will not want to invest in additional homeware.
Most furnished properties include the following:
When letting out a furnished property, landlords can benefit from several factors. Firstly, they are able to obtain tenants much sooner, reducing vacancy times. Additionally, landlords are able to gain extra rental income. OnTheMarket reported that landlords can benefit from as much as 20% higher rental income with furnished properties. Finally, the tenants are less likely to damage the property, as usually property damage occurs during the moving-in or moving-out process.
However, there are disadvantages to furnished property. Tenants who move into the property are usually expected to have shorter tenancy times. Also, the cost of buying the assets for the property can be a hefty fee for landlords. Furthermore, tenants are more likely to voice displeasure over the items if it does not fit their requirements. The landlord is liable for any wear and tear in the property, so repairs, maintenance or replacements could come at an additional cost.
Letting out unfurnished properties have many benefits to landlords. This includes longer tenancy times, as tenants are likely to stay put while obtaining their own furniture. As a result, the tenant will feel more ownership over the property. Furthermore, the landlord is not liable for any damage caused to the contents owned by the tenant. This saves landlords money long term as furniture will not need to be replaced or repaired.
However, in exchange, the landlord is sacrificing the additional rental income they can gain from a furnished property. Furthermore, the landlord will still be liable for the maintenance of appliances and white goods, which are generally more expensive. Additionally, in some cases, the tenant could build a bad credit rating if purchasing the items on finance, which could lead to late payments. Vacant periods could also be longer, as tenants trend towards furnished properties.
At CityRise, we believe there is no right answer for landlords, as both have advantages and disadvantages. We suggest that landlords take their time and decide what is more important to their investment strategy.
If a landlord would like to furnish their property, CityRise offers strong, stylish and durable furniture packs, here.
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