Furnished vs Unfurnished for Your Rental Property?

Posted on 01/06/2021

A furnished apartment can rent for more, but that’s not the only consideration.

As a landlord in search of a suitable tenant, one of your first decisions is to decide whether to rent out your property furnished versus unfurnished. While furnished rentals may command more rent in some markets, unfurnished rentals are more popular with long(er)-term tenants. And there’s more to consider…

Below, we evaluate the pros and cons of renting out your investment property furnished versus unfurnished.

But first, some definitions.

What is a Furnished versus Fully Furnished rental?

Furnished rental: can come with different levels of furnishing and accessories, but often include all major appliances, table and chairs for the dining area, a couch, and a bed and dresser in the bedroom(s) so that the tenant
Fully Furnished rental: comes complete with the furniture and accessories that make the home “turn-key,” or ready to live in. Aside from major appliances and furnishings, this could include pots and pans and tableware, bedroom and bathroom linens, as well as internet/cable service. If your rental caters to luxury tenants, you might consider including upscale items like rugs, wall décor, stemware, and a high-end coffee maker. A fully-furnished rental allows the tenant to move in without having to buy anything, aside from personal items, food, and speciality appliances.

What are the pros and cons of renting out your investment property furnished?

Pros of Furnished
- Higher rent rate; as much as 20% higher than an unfurnished rental although in the current market environment and especially in some neighbourhoods, there has been hardly any price difference
- Opportunity to target a specific type of renter; e.g. business professionals who prefer the convenience of not having to purchase furniture
- Tax deductions on a portion of the cost of replacement furnishings
Cons of Furnished
- Less applicants—Prospective renters may not like the look and feel of the furniture, limiting your field of qualified tenant application –are the furnishings contemporary and neutral, or is it time for an update?
- Replacement/repair costs on furniture due to daily wear and tear can add up over time
- Furnished rental works better in some locations over others; e.g. a furnished downtown condo near the CBD and transit typically rents faster versus a furnished single-family home in a residential neighbourhood
- Higher turnover, in general, and more frequent vacancy periods

What are the pros and cons of renting out your investment property unfurnished?

Pros of Unfurnished:
- More applicants—tenants can furnish the property as their home with their own furniture and to their own style
- Less preparation required for showings
- Less maintenance—no need to repair or replace furniture during or at the end of a tenancy
- Longer tenancies/less turnover since renters are generally more committed for the long-term once they’ve furnished the property
Cons of an Unfurnished Rental
- Lower rental rate, since furniture is not included
- Lower landlord insurance premium, since furniture is not included

Furnished vs Unfurnished: Ask a Rental Property Manager

To determine which option is more profitable, consider a call with a local rental property manager. After understanding your unique circumstances and preferences, an experienced property manager can speak to the market demand for furnished versus unfurnished rentals, current availabilities, and how much to charge.

Ultimately, the choice comes down to your personal preference. Was this your one-time home and you’d rather not pay to store your belongings, or is this an investment property that you’d prefer not to furnish?

Regardless of your situation, an experienced rental property manager can help you decide which option is better for you.

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