If you’re thinking about furnishing your rental property, it’s important to weigh the pros and cons first. You should only furnish your unit if you think it will benefit you and your tenants in the long-run. Furnishing can mean extra profit, but it can also mean extra problems.
Most unfurnished rentals come with basic appliances like refrigerators, microwaves, ovens and stovetops. Dishwashers and laundry machines are usually considered “bonus” appliances and revered by many. When it comes to couches, beds, tables, chairs, dressers, etc., it’s up to the landlord. Furnishing a rental unit is entirely the landlord’s choice, and there are no set parameters for doing so; “furnished” can mean an old couch and a coffee table, as far as the landlord is concerned.
+ Benefits of Furnishing
Furnishing your property can make a unit all the more appealing to potential tenants. People looking for a rental usually don’t have all of their own furniture, so you can expect lots of renters to be looking at your property if it’s furnished. A furnished rental is extremely convenient and will make move-in a breeze.
You’ll also be able to charge more for a furnished rental, which will help cover the costs of furnishing. Typically, landlords charge 30% more for furnished units. In addition, you may be able to claim the value of some furniture on your tax bill as a 5-year depreciable asset.
Furnishing is also helpful in maintaining the conditions of your rental. It may seem a bit counterintuitive, but having tenants lug their heavy furniture in and out of a unit can cause some damage. By doing the furnishing yourself, you will make sure items are handled and positioned properly.
– Risks of Furnishing
Having your own furniture in a unit may be risky if certain tenants cause excessive damage. However, if you screen your tenants thoroughly, you shouldn’t have much of an issue.
There is also the possibility that a tenant will not want the furniture in the rental. This leaves the dilemma of rejecting a person’s tenancy or putting the furniture in storage. Either way, you are incurring another cost.
+ Benefits of Not Furnishing
Some renters do enjoy customizing the interior of their home and “making it their own.” A furnished property would hinder them from doing so, as they will have to work with what is provided. It’ll also save you the time and trouble of picking out furniture and placing the items in the unit. (Keep in mind that you are allowed to put some restrictions on items, such as water-beds or barbeque grills, that tenants can have on the property).
– Risks of Not Furnishing
An unfurnished rental will inevitably have to be cheaper than a furnished rental, which means less income. There’s also more uncertainty because you don’t know what kind of furniture tenants are putting in the unit. Some items can be dangerous too. Large dressers or bookcases that the tenant assembled improperly could fall apart and injure someone. Heavy items can fall and cause damage as well. For instance, a filled hot tub could force a deck to completely collapse.
Tips for Furnished Rentals
- Pick furniture that is easy to clean.
- Give tenants adequate storage space.
- Opt for comfortable and functional pieces, like built-in shelving units, a leather or upholstered sofa, a living chair, a TV stand or console with storage, a bed with storage underneath, furniture with drawers, etc.
- Short-term rentals should be decorated in a manner that is simple and elegant; you should also reflect the unit’s location (i.e. a beach theme for a seaside vacation rental).
- Long-term rentals shouldn’t have any decorations; just basic furniture like a couch, coffee table, dining table and chairs, bed, desk and chair, a dresser, and a TV (if you’d like). Consider the “essentials” and let the tenants do the rest.
- Consider kid-friendly and pet-friendly options, depending on your tenants’ needs.
- Stage a model unit to show to potential tenants.