Renting a house is a business. One of the business considerations is whether you should renting a furnished house or unfurnished house. Some landlords prefer unfurnished houses because they are not ready to invest much, deal with regular furniture updates and damages. They let the tenant take charge of their furniture. Others like to rent furnished houses to appeal to a different clientele.
Just like every other major decision, you should consider all aspects before coming to a final decision between renting a furnished or unfurnished property. This might not sound like a big deal but can play a considerable role in achieving a profitable rental property.
We have compiled some noteworthy pros and cons of both options so that you can choose the direction best suited for you.
Types of tenants##
The criteria to furnish or not depends mainly on the type of tenants you focus on attracting. The types of tenants you are likely to attract with a furnished house are:
- Workaholics, professionals, people with a busy lifestyle
- Migrant tenants from other countries
- Corporate tenants
- Short-term or temporary tenants
- Young tenants who are just leaving the nest and starting to live independently
Whereas an unfurnished house is likely to attract:
- Long-term tenants
- Tenants who prefer to customize the interior
- Family-oriented tenants already owning furniture
Renting a furnished property##
'Furnished' is a diverse word - it could range from a partially furnished unit to a fully furnished unit. There are no hard and fast rules of what should be included in a furnished house, and you can decide the extent to which you would like to furnish your property.
A properly furnished property mostly covers almost everything, from beds to couches, from shelves to wardrobes, and even essential electrical appliances like oven and dishwasher. In the US, appliances like stove and dishwasher are typically included in every unit, furnished or not. In other parts of the world, the tenants bring their own stove. A furnished home can have a lot of benefits as well as some drawbacks, which we will discuss below:
- Your tenants would be spared from the trouble of spending extra money on all the furnishing
- You could save money if you purchase appliance and furniture for multiple properties
- You can reuse the furniture for yourself or offer it to your future tenants when the current tenancy ends
- Your taxes reduce as you can deduct some of the price of these services
- It is super convenient for the tenant if they can't afford to buy appliances or furniture of their own
- It adds more value to your offer, so you get better money. Although it entails an early heavy investment, it is a long term gain
- You could rent the place short-term on Airbnb,VRBO, etc
- It's expensive as you need to spend tons of money
- It's expensive for the tenants as the monthly rent will be higher to accommodate your higher expenses
- Less flexibility to the tenants to explore their taste and options, discouraging many potential tenants
- Furniture is subjective. Your choice may not appeal to tenants looking to rent a furnished place
- Needs frequent maintenance and property inspections to ascertain decent usage of equipment
Renting an unfurnished property##
Preferences play a huge role again. Unfurnished option appeals to people who like to make the place their home. Older tenants and the ones with families generally prefer this option as they already have their furniture collection. Here are some key pros and cons of renting an unfurnished property.
- Lesser risk of property damage as the tenants are responsible for what they bring
- An unfurnished home is like a blank canvas; it gives tenants the opportunity to decorate it the way they like. As a landlord, this will help you attract these kinds of tenants who like to furnish the place their own way
- You don't have any responsibility for insurance over the tenant's belongings
- It attracts long term tenants, thus enhancing your odds for long term profit
- Also, it is a less expensive option as you don't need to maintain or replace any items
- Unfurnished homes limit your options to a different segment of the tenant population
Furnished home does provide long term benefits to the landlord if the property is located in a busy town. However, a homey countryside house may be better off without furnishing. Long-term tenants who want to live in a rental home that reflects their own sense of personality would prefer an unfurnished home.
There is no definite answer to the question: to furnish or not to furnish. It boils down to how much money you are willing to invest, how frequently you can inspect the property, and what kind of tenants you are hoping to attract.