The choice to let out your rental property furnished or unfurnished is just one of the many decisions that landlords face when letting properties for the first time. There are benefits to both, and letting property largely comes down to comparing the up-front costs against the potential for a higher monthly rental income.
The decision to let furnished or unfurnished has bigger repercussions for your rental property than you may think. Not only will it affect your target market when looking for tenants, but it will also influence how much you can feasibly charge for rent, as well as the potential wear and tear your property may suffer.
The benefits of a furnished property
• As a landlord, letting out a furnished property could lead to a higher monthly rental income. Why? Because generally, the average professional tenant will be able to justify spending more on rent if they don’t need to invest in furniture. However, not every furnished property will command a higher rent. A student house, for instance, will more than likely be let furnished, but you would not necessarily expect the rent to be more expensive than a professional let.
• A furnished property can naturally appeal to particular types of tenants, such as professionals and students. For example, a student house needs to be functional, and most importantly, easy to clean! So you will not necessarily need to spend a fortune furnishing a student let, but merely make it comfortable to live in.
• In general, furnished properties are more in demand than unfurnished. As a result, you may be able to let a furnished property much quicker. That’s more time spent collecting rent and less time spent worrying about your unoccupied property.
And a few reasons to have an unfurnished property...
• Renting an unfurnished property reduces the potential for damage caused by general wear and tear. What’s more, with furniture being provided by the tenant, you are not responsible for insuring those items.
• Having bought their own furniture, tenants may stay in a property much longer. For example, a family who would be looking to make a home for themselves might want to make their mark on a rental property. As a result, they might be more likely to invest in furniture for future use than a student, for example.
• Having an unfurnished property is generally less hassle. Not only can you save time and money purchasing the contents in the first place, you’ll remove the need to replace the contents when they get worn down.
To furnish, or not to furnish? That is the question. This decision will most likely come down to whether the potential for income in the future justifies the upfront costs. You don't have to provide expensive furniture to make a difference, but it should be serviceable, clean, safe and appealing to the type of tenant you're hoping to attract.
Inventory checklist for a furnished rental property
If you’re a landlord who is furnishing a rental property for tenants, it’s crucial to have a thorough and detailed inventory checklist, so that you can resolve any disputes at the end of the tenancy. In an ideal world you won’t experience any issues, but having a shared document which has been co-signed by the tenant will make sure you’re covered should any problems occur.
You can prepare the list yourself or you can employ the services of a letting agent to help manage it. Whichever way you choose to go about it, you should complete it before the tenant moves into the rental property.
Your inventory checklist for a furnished rental property should include a comprehensive list of all items and details of their current condition, including:
• Every item of furniture
• Doors and walls
• Kitchen cupboards, units and any/all appliances
• Bathroom and bathroom fittings
• Outdoors – front and back garden (if any)
You also need to ensure you’ve got good quality photos of everything listed with written dates. If something gets damaged – either intentionally or by accident – during the tenancy, you’ll be able to refer back to your inventory, making it easier to inform your insurance provider.