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 command more rent, 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.
What is a fully furnished rental?
A fully furnished rental comes complete with the furniture and accessories that make the home “turn-key,” or ready to live in. These include all major appliances, pots and pans and tableware, table and chairs for the dining area, a couch, a bed and dresser in the bedroom(s), and often, bedroom and bathroom linens. 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 a Furnished Rental
– Higher rent rate; as much as 20% higher than an unfurnished rental
– Opportunity to appeal to 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 a Furnished Rental
– Prospective renters may not like the look and feel of the furniture–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
– More turnover, in general, and more frequent vacancy periods
What are the pros and cons of renting out your investment property unfurnished?
Pros of an Unfurnished Rental
– Less preparation required for showings
– Fewer maintenance concerns—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 rent rate, since furniture is not included
– Lower landlord insurance premium, since furniture is not included
Furnished vs Unfurnished: Ask a Property Manager
To determine which option is more profitable, consider a call with a local property manager. An experienced property manager can speak to the market demand for furnished versus unfurnished rentals, current availabilities, and how much to charge. He/she may also have a list of prospective tenants that meet your renter criteria.
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 property manager can help you decide which option is worth it for you.
How much does your property rent for?
Birds Nest Properties is a boutique property management company that specializes in serving owners of Vancouver, Richmond, Burnaby, North Vancouver, and West Vancouver rental properties.