The first-time landlords often face the dilemma of whether to furnish their properties or not. There are just tons of opinions on both sides of this. It seems there are different preferences depending on where you live. While in Florida people prefer fully furnished for short-term, in the Western States people prefer empty rentals and long term leases.
Anyway, it’s up to you to decide what is the best for your investment, but here are some pros and cons of furnished rentals from around the community of experienced professionals - landlords.
Pros of furnished rentals:
- The first and most obviously reason for furnishing is increased rent. Landlords can charge about $50 to $100 more in rent per week for a furnished apartment, depending on location and quality of furnishings, which does seem like a good return on investment if the furnishing didn’t break the bank.
- Furnishing your rental properties is a great way to target a specific group of tenants. In particular, furnished rental properties appeal to people moving from a significant distance as well as young tenants renting their first apartment. For such groups, it is not an option to transport furniture cross-country.
- As an independent business owner, landlords can benefit from certain tax breaks and deductions. By choosing to furnish your rental property, you are investing in both capital improvements and consumable products necessary to your business, and the purchases can typically be deducted and depreciated as business costs.
- Often landlords don’t have many options when it comes to staging – they either take pictures of whatever the current tenant has put in the apartment or display only images of empty rooms. Neither of these make for great marketing. When you choose the furnishing, you also control your public image, make it neat, sweet and cozy so tenants will strive to live in your apartment. Nice visualizations are very important to today’s renters.
- It’s remarkable how much damage moving furniture in and out of an apartment can cause to the structure. Whether it chips and dents in the walls, carpet wear and tear, or scraped tiles, moving furniture is a hazard. This happens when tenants are moving large pieces of furniture into a small apartment or trying to arrange furniture for a nice layout. Many landlords who pre-furnish apartments find that the property maintenance needs are greatly reduced, and that also means reduced costs for you.
And of course cons of furnished rentals:
- As a landlord, you already have extensive cleaning responsibilities before your tenants move in. By adding furnishings to the mix, landlords will also need to steam clean couches, check tables and chairs for damage, and decide what to keep, what to clean, and what to replace entirely. Many landlords simply aren’t interested in taking this on.
- Some landlords are simply against furnishing their properties, because they don’t want to manage young first time renters or short-term vacation rentals that can impinge upon space that could otherwise be occupied by a long-term tenant. By leaving properties unfurnished, landlords can narrow their potential rental search to those who have experience renting and are choosing a place to settle down.
- In some cases, unfurnished apartments simply rent more quickly and in these cases landlords may find themselves having to store what furnishings they’ve purchased. While storage space for one apartment’s furniture may not be a huge cost in the grand scheme of things, it can feel unnecessary and frustrating when landlords find themselves shelling out for garage space.
- Often people have their own furniture and do not want to be responsible for someone else’s things. Also everyone has their own personal style and taste and not everyone is going to like your decorating taste and if it’s not simple and clear enough it could turn away potential tenants.
If you are still hesitating between the leaving your rentals bare or taking a risk and bringing in furniture, maybe the starting point will be to provide just the essentials. The strategy is not the worst one, because it places some responsibility on the tenant while also making it easier to transit and increase rental income. Landlords who provide a few lamps, a couch and a table and chairs also cultivate goodwill on the part of their tenants, while still allowing tenants to make the space their own. The important thing is to keep track of all their assets in a list, which you can do in TenantCloud, you know :)