Choosing between renting your house furnished or unfurnished is a big decision that can shape your rental income, target market, and overall management approach.
In this article, we'll get into the pros and cons of renting a furnished property, giving you the insights you need to make a choice that fits your investment goals and appeals to your ideal residents. Let's explore how furnishing your rental could be the right choice for you!
What Does a Furnished Property Mean for a Landlord?
A furnished property comes with all the must-have furniture and appliances that will make a rental property feel like home from day one. This usually means providing beds, dressers, sofas, dining tables, chairs, and all the big appliances like refrigerators and washing machines.
Some landlords take it up a notch, throwing in kitchenware, linens, and even stylish decor. The amount of furnishing can vary, but the idea is to provide a move-in-ready space that saves residents from needing to make any big purchases.
Who Rents a Furnished Apartment and Why?
Corporate Relocations
Professionals on temporary assignments often look for furnished accommodations because they provide a convenient, ready-to-use living space without the need to transport or purchase furniture for what may be a limited stay in a new location.
Students
International or out-of-state students frequently opt for furnished units because they make moving to a new city hassle-free, since they won’t need to worry about buying or getting rid of furniture.
Short-Term Residents
People going through transitional periods, like recent divorcees or those between homes, often prefer furnished rentals. These cozy, fully-equipped spaces offer comfort and convenience during a time of change, without the hassle of buying furniture for a potentially temporary stay.
Military Personnel
Service members on temporary duty assignments often look for furnished housing since it allows them to quickly settle into a new location with all the comforts of home, without the logistical challenges of moving furniture for each new posting.
Travel Nurses and Healthcare Professionals
Medical staff on short-term contracts often prefer furnished rental properties because they’re a turnkey living solution that aligns with their mobile lifestyle, allowing them to focus on their work without the stress of setting up a new home for each assignment.
Advantages of Furnished Apartments for Landlords
Higher Rental Income
Furnished rentals generally rent for more than unfurnished units, depending on factors like location, square footage, and the quality of the furniture and appliances you provide. This potential for increased income can boost your overall return on investment.
Shorter Vacancy Periods
Furnished properties often experience shorter vacancy periods. They appeal to a niche market of residents who need immediate, move-in-ready accommodations, which can lead to quicker turnovers between residents.
Simplified Move-In and Move-Out Processes
Furnished rentals make moving in and out a breeze. Residents can skip the hassle of coordinating big furniture deliveries or removals, reducing the risk of property damage and making the whole process smoother and stress-free.
Diversifying Your Portfolio
If you’re able to have both furnished and unfurnished properties in your portfolio, you can expand what you’re able to offer to renters.
Reduced Wear and Tear on the Property
Furnishing your rental with your high-quality items can reduce wear and tear on the property. Residents are less likely to be moving heavy furniture in and out, which can damage floors, walls, and doorframes.
Disadvantages of Furnished Apartments for Landlords
Higher Initial Investment Costs
Furnishing a rental property requires a significant upfront investment. Quality furniture and appliances can be expensive, and this cost needs to be factored into your overall budget.
Increased Maintenance Responsibilities
With furnished rentals, landlords are responsible for maintaining and replacing furniture and appliances in addition to regular property maintenance. This can mean you spend more time fixing things and you have to think about the additional costs that come with upkeep and repairs.
Greater Risk of Damage to Furnishings
While a furnished property can protect the property itself from wear and tear during move-in and move-out, the furniture itself might be damaged by residents. Repair or replacement costs for damaged furniture can eat into your profits if not carefully managed.
Does It Make Sense to Furnish Your Properties?
The decision to rent your house furnished depends on several factors:
Location
The location of your property is key when deciding whether to furnish it. If you're in an area with corporate offices, hospitals, universities, or tourist hotspots, there's likely a higher demand for furnished rentals. This can mean more tenants and better rental income for you!
Property Type
The type of property you own can play a big part in whether you should furnish it. Smaller units, like studios or one-bedroom apartments, are perfect for furnished rentals since they appeal to people looking for a hassle-free, move-in-ready solution.
Larger single- or multi-family homes, however, might be better off unfurnished, since larger spaces are more expensive to furnish and long-term residents often prefer to bring their own furniture and make the space their own.
Your Investment Goals
Your long-term investment strategy should guide your decision on whether or not you’ll rent a furnished property. If you're hoping for higher short-term returns and are willing to take on additional management responsibilities, furnished rentals could fit your goals.
However, if you prefer a more hands-off approach with longer-term residents, an unfurnished property might be the better option.
Local Regulations
Local laws and regulations can significantly impact your ability to offer furnished rentals, especially for short-term leases. Some cities have strict rules around short-term rentals, including licensing requirements, occupancy limits, and tax obligations. It's crucial to thoroughly research and understand these regulations to ensure compliance and avoid potential legal issues.
Conclusion
Renting your house furnished can be a great way to boost your rental income and fill a niche in the market. However, it does come with extra responsibilities and upfront costs. Ultimately, the choice depends on your unique situation, investment goals, and the market you're targeting.
Stonelink Property Management helps property owners navigate the complexities of renting properties in Rhode Island and Southern Massachusetts. Our team of experienced professionals can do market analysis to determine if renting a furnished property is right for you.
Our comprehensive property management services can help you achieve your real estate investment goals. Get in touch today!
