Furnished or Unfurnished?
A key question for property owners interesting in renting out their homes or condominiums is whether they should rent their unit furnished or unfurnished.
In past blogs we have discussed the obvious advantages of including appliances such as fridge and stove to attract tenants. The decision to rent a unit furnished or not, usually depends on the preferences of the owner. Some owners prefer not to sell their furniture (at steep losses) or house them in storage. In that respect the decision is a practical one. There are advantages and disadvantages to both. Below we list both the benefits and the shortfalls of renting a furnished property.
1. The unit will generate greater rental revenue, sometimes as much as 50% more
2. You are prone to attract higher quality tenants, for example those that are on assignment in the city through their work and that have good salaries and corporate support from their companies.
3. No need to sell furniture at steep discounts or have them placed in storage at significant cost
4. Ideal for temporary no hassle relocation of owner to new geographies or a new home, without the need for a moving truck or large moving expenses
1. The potential market for a furnished unit is usually much smaller than an unfurnished one. This means, finding a tenant will take longer and vacancy rates will be higher. May mean longer periods that your property remains unrented and empty.
2. Tenants attracted to furnished units may not desire long term leases but short term ones such as 6 months.
3. Wear and tear of valuable furniture may be accelerated with tenant use versus owner use
4. A detailed inventory is necessary prior to tenant moving in and following tenant move out to ensure contents of unit do not disappear
5. Furnished units may produce an increased number of calls for malfunctions – not only appliances but items such as TV, stereo, even the toaster!