Many property owners are faced with the decision of whether to rent a fully furnished property or not. A furnished rental may create more interest during the marketing process but it also means setting aside an extra budget to furnish the space. Read on to find out if furnishing a rental is a worthwhile thing to consider.

During property showings, a tenant will look around to see what amenities you offer and if the price is reasonable based on the features of the unit. Some landlords invest in rental improvements to attract long-term tenants. 

Most tenants looking for a furnished rental do so to maximize savings. They don’t want to spend on big-ticket items such as tables, couches and appliances. 

Usually, young people who are attending college and professionals just starting out a appreciate furnished apartment over unfurnished rental properties since they have limited savings to cover the cost of their own furniture. 

How Furnished Homes Should Look

If you decide to cater to a selected demographic then you need to set aside funds for purchasing furnishings. 

The following are typically seen in a furnished unit:

• Dining Room: A dining table and chairs
• Kitchen: A stove, refrigerator, oven, microwave, coffee maker, and toaster. Some landlords also provide cooking utensils and dishware
• Living Room: Spaces are equipped with a sofa, table, and TV set
• Bedrooms: A bed, cabinet, and nightstand

Some owners choose to add artwork, lamps, and other appealing interior decors to enhance the furnished property. In the end, the decision on what furnishings to provide rests with the owner.

Renters Are Attracted to Furnished Units

Not every tenant is looking to rent a furnished property. Some prefer unfurnished rentals so they can use furniture that better matches their own taste and style.

Certain demographics prefer furnished rental properties such as students, young professionals, and tourists who aim for convenience. 

Residents looking to move into a particular neighborhood may do a trial run by renting a space temporarily to ensure they’re making the best decision. 

Furnished places draw travelers seeking a convenient stay. Booking hotels can be pricey. People who are temporarily attending seminars and training may also prefer furnished rentals similar to students finishing a course at a nearby university. 

The objective of these types of tenants is to save time, money, and effort from moving their own belongings back and forth.

Advantages of a Furnished Rental

Earning More Is Possible

With a furnished rental, it’s acceptable to charge a higher rent price considering that there are ready-to-use items available. 

Rental owners also need to be careful and know if the market they’re targeting is able to afford the rent they’re assigning. If the rental fee is beyond what your market is willing to pay then you can risk having a vacant unit. 

Underpricing your property, however, can also result in not optimizing the profit you earn. You can try looking for sources of objective comparison to ensure you set an accurate rate.

Ask for Higher Security Deposits

Managing a furnished rental property means you have more items you need to protect. It makes sense to request a higher security deposit or more rent to reduce your risk exposure. 

This will reduce your stress in case some appliances break down since you’ll have a higher security deposit that’s allocated for damages if you rent your property furnished. 

Landlords should note that they’re responsible for maintaining the property, paying for renovations, or replacement for damages involving wear and tear.

Less Risk of Damage Caused by Moving

Since furnished rental homes don’t need additional appliances and furniture, you can experience peace of mind knowing that renters are not moving heavy objects that can potentially damage your unit. The risk of having to repair scratches or scrapes is reduced.

Attract Diverse Tenants

A furnished rental property is attractive to a wide pool of prospective tenants, creating more marketing opportunities for the landlord. 

You can choose to target tourists, students, or professionals if your rental space is near an attraction, university, or right in the middle of the central business district.

Disadvantages of a Furnished Rental

Large Initial Investment 

Furnishings can set you back since they're a sizeable investment. This means dedicating more time to maintaining them. 

You need to perform regular inspections to check on the appliances and furniture and get them repaired or replaced when required.

Rental owners also need to schedule routine cleaning to take better care of the furnishings in their units. They need to insert a clause in the lease or rental agreement governing damages caused by renters to reduce future disputes.

Short-Term Renters 

Most furnished rentals are sought after by tenants looking to stay temporarily in short term rentals like vacation rentals. 

Some would only be staying in the short term rental for a few weeks or months to complete training, enjoy their holiday, or finish a course. For this reason, landlords must continuously advertise their rental homes. 

There may be some off-peak periods when there are fewer tenants. Landlords can assign a lower rent during this time. The important thing is to find ways to shorten periods of vacancy.

Things to Keep In Mind Before Furnishing Your Rental

Before you finalize furnishing your rental space, there are things to be mindful of, such as:

Rental Home Location

Observe your rental unit’s location. Is it strategically close to tourist attractions, the business district, or colleges? 

If it is, you have a ready market to serve. You wouldn’t find it tough to market your rental space.

Prospective Tenants

What type of potential renters would be attracted to your unit? Are they available in your area? If yes, you can start furnishing your rental.

Market Conditions

Is the market you’re targeting able to afford the rental rate you set? Though furnished properties can lead to increasing your income, this can also depend on how much your target demographic is willing to pay.

Bottom Line

Furnished units are attractive to a variety of tenants. But before proceeding, you should study your market first. 

If you’re looking for a reliable property management company to find suitable renters and manage your rental investment, contact First & Main Property Management today!