When considering offering a furnished rental, landlords have a lot to consider. While families are likely to have furniture, a young person or professional who is relocating might not. Furthermore, short term renters as opposed to long term renters may prefer furnished rentals, and while these tenancies would turn over more it could afford the opportunity for a landlord to charge higher rent. What are some other pros and cons of furnished rentals?
Pros of offering a furnished rental
- Wide demographic appeal
One great aspect about listing a furnished rental is the wide appeal it will have to different demographics. Furnished rentals are attractive for single people living in a one bedroom place, student accommodation, and large family homes.
- Higher rent
Figures show that furnished rentals are able to successfully charge higher rent, and furnished 3 bedroom apartments can bring in 25% more income than unfurnished.
Cons of offering a furnished rental
- Initial expense
If you are renting out a large house, it can be too expensive to furnish it. While the increased rental income of a furnished home will eventually recoup furnishing expenses (barring no major maintenance), it can be a number of years before you see the increased return.
- Maintaining chattels
When furnishing a rental property, the landlord is responsible for maintaining all chattels and supplying them in good condition. If something breaks, the landlord is responsible for fixing the item. Luckily as a landlord, you can depreciate chattels to offset tax. You can learn more about chattel depreciation here.
Offering a furnished rental can increase earnings for a landlord overtime, but maintenance and initial investment concerns should be considered and calculated before making a decision to furnish a rental property.
A middle of the road option is to offer a semi-furnished rental. This option may still entice a wider demographic and afford for higher rent, while reducing your overall costs in purchasing and maintaining the chattels in your rental property.