One of the many decisions property investors must make when they let out their properties is whether to offer them furnished or unfurnished.
There are numerous factors to consider when deciding between letting your home out furnished or unfurnished, and keeping your target tenant and their potential needs firmly in mind can be a good way of making that decision. Attracting good quality tenants can make a huge difference to your overall success and returns.
The way a property is presented to prospective tenants is important, whether that be furnished or unfurnished – but it is also important to be flexible, and cater to the different needs of your tenants. For this reason, many landlords will list their property as “furnished or unfurnished”, so the tenant can choose what suits them best.
The pros and cons of furnished
- City centre locations may see more demand for furnished properties. These areas and property types can also offer some of the highest yields in the rental market. Furnished properties can also sometimes be rented out for a higher price then unfurnished ones.
- The target tenant type in these locations is often young professionals, first-time renters, corporate tenants, and lifestyle renters looking for a commitment-free and flexible accommodation option. There is therefore likely to be a greater number of tenants looking for city centre, or town centre, flats that are furnished.
- If you’ve invested in any property, but particularly in a new-build, purchasing a furniture pack can be a popular option. This ensures the furniture is in keeping with the property, and within a set budget.
- If you do offer furniture – which can include beds, wardrobes, sofas, armchairs, dining tables and chairs, kitchen appliances and more – it is important to note that you as the landlord are responsible for any repairs or replacements. Electrical appliances must be PAT tested before each tenancy, and if you offer upholstered furniture, it must have the necessary fire regulation labels.
- Whether the property is furnished or unfurnished, the landlord must take out the relevant type and level of insurance, but where it is furnished most landlords take out contents insurance to cover these items, which is another expense to be aware of.
The pros and cons of unfurnished
- Unfurnished apartments and houses can be found in any location, but are particularly popular among families, older or long-term renters who already have their own furniture. Or they may intend on staying in the property as a long-term option, and therefore wish to furnish it to their own taste and make it their own.
- Often, smaller properties like one- and two-bedroom flats are offered furnished, while larger homes and houses are offered unfurnished, but this isn’t always the case.
- While unfurnished properties can still produce excellent yields – as this tends to come down to factors like property type and location more than whether it is furnished or unfurnished – they sometimes attract lower rents than furnished homes.
- For landlords, unfurnished rentals avoid the cost and effort of buying, maintaining, repairing and ultimately replacing items of furniture, while also saving on the amount of work you might need to carry out between tenancies.
- It can also make your insurance cheaper, although it is still important to take out adequate insurance, as well as to take a professional level inventory of all the permanent fixtures and fittings.
Deciding between furnished or unfurnished
A letting agent or property investment consultant might be a good port of call to discuss whether to offer your rental property furnished or unfurnished.
They will have the relevant market insight for demand in the area, and are likely to know whether furnished or unfurnished homes are more popular among tenants for a particular property type.
However, flexibility on a case-by-case basis is also important. Tenants may want to bring their own bed and wardrobe, but want to keep the rest of the furniture on offer, so it can be beneficial to the landlord to adapt the property to these needs in order to attract better, more long-term tenants.
If you’re looking for your next property investment in one of the UK’s most lucrative locations, or need some advice on your current investment portfolio, get in touch with BuyAssociation today.
