Education and news for smart DIY landlords!
If you're thinking of becoming a landlord, you might be wondering if you should offer tenants a furnished or unfurnished rental. Don't worry, most new landlords worry about this aspect too. The truth is, there are pros and cons to furnished and unfurnished rentals. Let's dive into the advantages of going for one over the other in today's article.
A furnished apartment means different things to landlords and tenants alike. But here's the definition we can all agree with: A furnished apartment comes with the things that tenants need to live comfortably. It could have a sofa, table, lamp, kitchen table, kitchen appliances, and more. You get the idea. But take note that perishable items are not included (such as food).
Now that you know what a furnished rental is, why should you choose this option for your business? Here are three main reasons:
The fact is that you'll be able to demand higher rent from tenants. You can rent a property for 25% to 75% more. But take note that rates still vary from city to city. While you earn more, put in mind that some of your tenants will only stay short-term. Be prepared for short-term stays.
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Another benefit of offering a furnished rental is that tenants can move in without hassle. They simply need to bring their clothes and essential items, and no longer worry about furniture. A furnished rental benefits tenants who are busy or don't want to own large items.
Generally, landlords can charge more for the security deposit. Furnished rentals have equipment and furniture that are likely to sustain damage. A higher security deposit will help cover for the repair or replacement of damaged materials. Landlords may charge up to two months' rent for an unfurnished rental. For a furnished rental, they may charge for three months plus the first month's rent.
Now, let's move on to unfurnished rentals. What benefits do they have?
This is a huge one. Landlords want to avoid vacancies as much as possible, and having an unfurnished rental promotes a longer tenancy. Why? The reason is that unfurnished rentals encourage tenants to make the space their own. They're going to have to decorate it to suit their needs and preferences.
Related article: Top Reasons Why Your Rental Is Still Vacant
Less tenant turnover, less worry about damage, less management. You get the picture. And while tenants go through the process of buying new furniture (if they don't have one yet), they could save more money long-term since they can take their furniture with them wherever they go - in case they decide to move to another rental.
Tenants are happier in the sense that they can decorate their own space. Renters who are looking for a long-term accommodation gets an opportunity to be creative with their new home.
With these ideas, hopefully, you'll be able to decide what's best for you. As a landlord, consider the kind of tenants you want to attract, how much you want to earn, and your tenant's freedom to personalize. Good luck!