You have just purchased your first investment property and now you have to decide whether to rent it out as fully furnished, partially furnished or unfurnished. Each option has its own specific pros and cons which landlords need to consider. Think about the functionality and purpose of the property, the current rental market, and who your ideal tenant is.
Fully Furnished Rental Units
Furnished units can charge higher rent and they have less competition. However, landlords will need to invest more in maintenance and should also realise that there may not be as many tenants looking to rent a furnished place.
Vacation homes and apartments are probably the most logical reason for landlords to fully furnish their units. If the property is intended for short-term leasing (usually six months or less) to vacationing tenants, or foreigners who are traveling on a working holiday, they should be furnished and nicely decorated. People on vacation will not bring furniture with them and they still want to stay in a pleasant environment.
Rentals intended for business people should be furnished elegantly and provide all the personal and business amenities that would be available at a hotel (internet/wireless access, network TV, linen and bedding). These units are usually rented out for anywhere between several days to a couple of months and they are most often located in business districts and near airports.
Flats that are near a university campus, which landlords are willing to rent to students, should be furnished with sturdy furniture that will, on the one hand, survive lots of abuse while, on the other hand, be cheap enough to replace when it’s needed.
Partially Furnished Units
Newlyweds and young people who have had time to accumulate some furniture but not enough for an entire house would most likely appreciate partially furnished apartments which usually include kitchen appliances such as a stove, refrigerator, dishwasher; white-ware such as a washing machine and dryer; and maybe a piece in the living room and/or bedroom. Landlords should provide attractive furniture in neutral colours so that it does not look out-of-place with the tenant’s own furniture.
Empty, Unfurnished Units
Renting a unit as unfurnished will attract the highest number of tenants but there is higher competition as well.
Tenants want to make their rental units as comfortable as possible so they want to add their own touches to them. This means they want to rent an unfurnished home so they can bring in their own furniture and miscellaneous decorations. Unfurnished rentals are the least amount of work for a landlord because you only have to deal with the house and not the contents in it.
Would you lease your rental as furnished or unfurnished?