As a landlord, you should give some serious thought to the advantages and disadvantages of renting out properties furnished and unfurnished
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There isn’t one clear-cut answer, as there are pros and cons to both options. The final decision should be based on various factors such as the required tenant profile, the property itself and the location.
What are the differences between furnished and unfurnished?
This may seem obvious, as the names seem self-explanatory, however, it’s not so cut and dried, as even an unfurnished rental must contain some key items of furniture.
An unfurnished buy-to-let home should include bathroom and kitchen fixtures, white goods such as fridge, freezer, cooker and washing machine, some type of flooring such as carpets or laminate and blinds or curtains. The property is hardly empty, but it’s very different from a furnished home.
An unfurnished house or flat has minimum requirements, but a furnished home can be interpreted in different ways, as there’s no set standard on what must be included. A general rule of thumb is that all tenants must be able to live comfortably, but one landlord may include more items of landlord furniture than another.
A furnished property should contain all the items that an unfurnished home has, plus extras including a dining table and chairs, tableware, settees, armchairs, wardrobes, beds and a chest of drawers.
Other items may be provided such as bedside cabinets, lamps, extra cupboards and chests of drawers and optional extra pieces of furniture.
What should landlords take into consideration?
A key consideration is the tenant’s needs, as if you wish to attract the right demographic of potential renters, you need to provide the appropriate properties. The main thing every landlord wants is a good return on investment. If your property isn’t rented out, you’re not receiving anything back, so it’s important you get it right.
For example, if you have a buy-to-let flat in the centre of London, you’re going to attract a different type of tenant from an HMO located near a university. Do your homework to find out the main demographics in your area and determine which properties are in the greatest demand.
Secondly, if you do rent out HMOs to students or other younger tenants, you will most likely have to provide a furnished home, as they won’t have their own furniture to take with them. In the case of students, they just want somewhere convenient to live so they can move in without hassle before term starts and leave for a new career at the end of their course.
In general terms, furnished homes usually attract tenants requiring a short-term let; those who wish to live closer to their workplace; people from overseas; corporate tenants needing a place for employees or clients; and young professionals wishing to live in a particular area who can’t afford a mortgage.
Unfurnished homes often attract longer-term tenants, people who have their own furniture already and families who wish to make their living space feel more homely by choosing their own furniture.
What are the benefits of an unfurnished property?
From a landlord’s perspective, house furnishing can be time-consuming and expensive, so it can be cheaper at the outset to let the tenants take their own furniture. In addition, you won’t need to take out content’s insurance for the tenants’ furniture, as it will be their responsibility.
However, obtaining furniture for landlords need not be a hassle if you choose furniture packages from a reputable supplier. As a landlord, this can save you time and money, while also ensuring every item meets legal safety requirements.
What are the advantages of a furnished property?
By renting out unfurnished homes, landlords are losing a large sector of tenants who want to move into a property with adequate furniture quickly and cheaply. You’re effectively reducing the pool of tenants who may be ideal for living in your property.
Giving potential tenants the option of moving in right away with a house full of good quality furniture can give you the edge over landlords who require new renters to provide their own furniture. For some tenants, buying and transporting “everything but the kitchen sink” can cause them more headaches when moving house.
When you provide the furniture, you will also know it’s of legal quality in terms of health and safety regulations, especially the Fire and Furnishings Act when it comes to soft furnishings.
You can generally charge more rent for a fully furnished property, as it can be reflected in the price, especially when you’re providing modern furniture of a high standard in an area attracting professionals.
All things considered, furnished properties are more of a benefit for landlords, as they tick all the boxes mainly by appealing to a wider demographic of tenants and enabling a higher yield on rent.