Should Rental Property Be Furnished or Unfurnished?

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.

Pros & Cons of...

Furnished Properties

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.

Unfurnished Properties

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.