Are you looking for ways to attract more tenant’s to your rental properties? As a landlord, you want to make the most out of your investment. Furnishing your rental property might seem like an added expense, but it could also be a smart strategy to increase rental income and appeal to a wider pool of renters.
So, should you rent your house furnished? Let's dive into the benefits and drawbacks to help you make an informed decision!
What Does a Furnished Apartment Mean for A Landlord?
A furnished rental property comes with all the necessary furniture and appliances for a tenant to move in and live comfortably without bringing their own items. This typically includes a bed, sofa, dining table, chairs, and appliances like a refrigerator, stove, and washer/dryer.
Other items that may be included in a furnished rental unit can include a TV, coffee table, lamps, dressers, kitchen utensils, dishes, and cookware. Landlords may also provide linens such as sheets and towels, although this is not always true.
Who Rents Furnished Units And Why?
Furnished properties are popular among a variety of renters for a range of reasons. Here are some of the types of renters who typically opt for furnished apartments and why:
- Short-term Renters - Individuals who are only staying in a location for a few months or a year, may prefer to rent a furnished apartment rather than purchase furniture they will need to move on later.
- Students - Students who are only in a location for a limited time may prefer the convenience of a furnished apartment.
- Vacationers - Individuals on vacation may prefer to rent a furnished rental property instead of staying in a hotel. Furnished spaces offer more amenities and can be more cost-effective for longer stays.
- Contract Workers - Renting a furnished property allows them to live comfortably without the added expense of purchasing furniture.
Advantages Of Renting A Furnished Apartment
If you're a landlord or property manager, you may wonder if offering furnished spaces are worthwhile. Offering furnished apartments can be smart for landlords who want to increase their rental income and attract a wider pool of tenants. However, it's important to carefully consider the costs and benefits before deciding.
Here are the advantages of renting a furnished apartment and how they can benefit you as a landlord:
Can Charge More for Rent
One of the biggest advantages of renting a furnished apartment is that you can typically charge more. This is because tenants are willing to pay extra for the convenience of not having to purchase furniture and appliances themselves. On average furnished apartments can command higher right prices than unfurnished apartments, depending on the location and quality of the furnishings.
Furnished Apartments Require Higher Security Deposits
When renting out a furnished property, it's common practice to ask for a higher security deposit than you would for an unfurnished one. This is because there is more risk for the furniture and appliances included in the rental. A higher security deposit can help protect you as a landlord in case of property damage or loss of furnishings.
Helps You Narrow Down Your Target Market
Offering furnished apartments can be great if you're looking to target a specific market. These types of renters may be more willing to pay extra for the convenience of not purchasing furniture, making a furnished apartment an attractive option.
Reduced Chance of Property Damage
When tenants move in and out of an unfurnished rental, there is a higher risk of damage to the property from moving heavy furniture. With a furnished space, tenants don't need to move in their furniture, reducing the likelihood of scratches and scuffs on your property’s floors and walls. This can ultimately save you money on repairs and replacements in the long run.
Allows You to Provide Different Options for Tenants
You could also offer rental spaces with different furniture packages at different price points, allowing tenants to choose the best option. This can help you attract a wider pool of renters and increase your overall occupancy rates.
Disadvantages of Renting a Furnished House
While there are many advantages to renting a furnished property, there are also some disadvantages that landlords should consider before deciding to offer one. Here are some disadvantages of renting out a furnished house and how they can impact your investment:
Higher Upfront Costs
Furnishing a rental property can be expensive. Depending on the quality of the furniture and appliances you choose, you may need to spend a significant amount of money upfront to furnish your property. This can be a significant barrier for landlords who are just starting out or have limited investment funds.
Furnished apartments require more maintenance than unfurnished ones. You'll need to clean and maintain the furniture and appliances and replace anything damaged or worn over time. This can be time-consuming and costly.
When you provide furnishings for your tenants, you also take on additional liability. If a tenant is injured due to a malfunctioning appliance or damaged furniture, you could be held responsible for any medical expenses or legal fees. This can be a major risk for landlords, particularly if they don't have adequate insurance coverage.
The decision to rent your house, furnished or unfurnished, depends on your circumstances and goals as a landlord. While offering a furnished rental can be a great way to increase your rental income and attract a wider pool of tenants, it also comes with some significant drawbacks that must be carefully considered.
Considering renting your house furnished? It’s important to carefully weigh the costs and benefits before deciding. You should also protect yourself as a landlord by investing in insurance coverage, setting aside funds for maintenance and repairs, and carefully vetting tenants.
If you're in the market for a property management company to help you manage your rentals, contact Draper Realty today!