Furnished Or Unfurnished: Are you considering adding furniture to your rental apartment? Or do you need more information before making that decision?
Knowledge is vital whether you’re planning to expand your portfolio or break into real estate for the first time. Knowing what you stand to gain or lose is essential to strategically marketing your rental property. That’s why this article is here to help.
Furnished or unfurnished: what every landlord should know delves into the nitty-gritty of providing furnishing rental apartments. Keep reading till the end to find out the pros and cons, target audience, and helpful tips for choosing furniture.
Pros And Cons Of Renting A Furnished Property
- Higher Rent
Furnishing an apartment involves installing everything a tenant might need, from the mattress they sleep on to the pans and pots. As a result of providing such convenience, landlords can charge higher rates for their rentals. Since most of these are one-off costs, it can easily mean more profits for you.
- Higher Security Deposit
Another benefit of furnishing your apartments is that it gives you a reason to charge a higher security deposit. In unfurnished units, only the property is your concern. However, with furnished apartments, landlords have to bear significantly more risk. Thus, it can justify charging a heftier deposit or requiring tenants to obtain a renter’s insurance policy.
- Increased Demand
Depending on market forces, you might be able to rent out your property faster. Furnished apartments are in higher demand in certain places and attract more eager tenants. As a result, that increase in demand could drive up the price of your rental. Also, lower vacancy rates mean you spend less money on marketing and servicing an empty unit.
- Higher Upfront Cost
Of course, the major trade-off of furnishing your rentals is the higher upfront cost. You have to invest in heavy-duty appliances and furniture like a fridge, dishwasher or dish brush, and Sofa Club. Depending on the size of the rental, and the quality of the items, this could be a costly endeavor, especially if you have multiple apartments to furnish.
- More Repairs
If you plan on investing in a Furnished apartment, you have to be ready for a torrent of complaints. Everything that goes wrong in the house, from faulty fridges to broken chairs, is your business. While charging a higher security deposit can offset this cost, proving tenant damage is not always easy. Thus, you might have to pay for some repairs out of pocket.
- Limits Tenants’ Expression
While furnishing your apartment can increase its demands, it can also be off-putting to some tenants. For instance, families and individuals with pre-existing furniture might prefer a blank slate. Even tenants looking for a furnished unit might not be keen on your taste and style. Without the ability to personalize their space, tenants might not feel like your rental property is a home.
Types Of Tenants That Look For A Furnished Unit
Many people travel to attend their college of choice. Of course, since school calendars take up most of the year, such students require a home away from home. Thus, many of them are willing to pay extra to avoid the hassle of looking for furniture while going to class. The key to success is to choose durable furniture that offers added storage or workspace to fit the needs of a busy student. Besides, furnished apartments are a big market around college campuses.
- Young Professionals
Like students, young professionals value the time and convenience a furnished apartment affords them. Most of this demographic are new to the corporate world and still figuring out where to plant their roots. They also value proximity to other amenities like public transport, restaurants, bars, and gyms.
Another popular audience you should try to market to is travelers. Although they’re often after short-term stays, vacancies may be few and far apart in tourists’ hotspots. Of course, that might also depend on the season. Listing your property on popular sites like Airbnb can undoubtedly help with traction. Also, you can offer additional services like cleaning, laundry, or meal delivery to attract more people.
- Corporate Clients
Corporate clients refer to tenants or organizations that might want to rent your apartment for work-related reasons. These renters are usually after a clean space with fast Wi-fi so occupants can work efficiently. Depending on the client, it could either be a short-term rental agreement or an ongoing lease.
Tips For Choosing The Best Furniture
- Make a Checklist
The first thing you should do when you plan on furnishing a rental apartment is to make a checklist for each room. You need to include specific necessities if you want to attract tenants. For example, you might include a bed frame, mattress, table, chairs, and possibly a desk. After making your checklist, you can adequately estimate and budget for your rental. It’s also helpful in keeping your apartments uniform when you’re furnishing more than one unit.
- Keep it Neutral
When you go out to select furniture, try to keep it as neutral as possible. Remember that you’re not decorating the space for you, so stick with generally appealing designs. That also applies to your wallpaper or painting. If you choose bold colors or prints, you risk limiting your potential market. Also, It would be best to stick to a color palette to avoid going overboard.
- Go for Durability
Since the upfront cost of furnishing a house can be pretty expensive, it might be tempting to cut corners. However, opting for lower-quality furniture can hurt you in two ways. First, it can dissuade prospective tenants from renting your apartment if the quality is too low. And second, it’s a short-sighted investment that’ll cost you more money to repair or replace at a later date.
Ultimately, whether or not to furnish a rental apartment belongs to the property owner. After all, you have to carefully weigh the pros and cons and decide if it’s for you. However, it would help if you also kept in mind that external forces can affect the success of your decision. For example, an unfurnished vacation rental wouldn’t fair very well in the market. If you decide to invest in furniture, choose durable pieces with neutral tones for maximum appeal.