Furnished rentals can be a great option for people who are short on time and resources, but actually finding those tenants can be challenging. In this post, we will look at some of the drawbacks associated with furnished rentals so that you can make an informed decision about whether it is the right choice for you.
Furnished rentals can seem appealing, but can come with issues
At first glance, furnished rentals may seem like a convenient option for both landlords and tenants. It may seem easier for landlords to leave their existing furniture in the property instead of having to store or move it. However, it is important to understand that a furnished unit is not always of higher value to tenants. In fact, long-term renters often prefer to bring their own furniture and add their personal style to the space. As a result, property investment in furnishing a rental may not always yield the desired returns.
The reality of furnished rentals
While the idea of renting out a furnished apartment or home may seem like an easy way to attract tenants, the reality is that it can be much harder than expected. Tenants almost always have their own items, art, furniture, etc. that they want to bring if they are moving into a home long term. This means that furnished rentals may only appeal to a small group of people, such as short-term renters, students, young adults just starting out, traveling medical practitioners, or people moving long distances.
It’s important to set a realistic price point for your furnished rental property investment that is both attainable for the demographic you are targeting and reflective of the local market. However, despite these challenges, if marketed properly and with the right strategy in place, furnished rentals can still be a viable option for some property investors.
The challenge of finding tenants
One of the biggest challenges of owning a furnished rental property is finding tenants who are interested in renting a fully furnished unit. As we mentioned earlier, only a small amount of prospective tenants are interested in renting a furnished apartment or home. This means that you should be prepared for your property to sit on the market longer than an unfurnished property would.
Another factor to consider when looking for tenants is the quality of the furniture and decor in the unit. Older, outdated, or damaged furniture may not be a problem in your own home, but renters do not want to pay a premium for unattractive items. This means that you may need to invest in higher-quality, modern furniture and decor to attract tenants and command higher rental rates.
Finally, it’s important to price your furnished rental property appropriately. Your price point needs to allow for the replacement of furniture and other items in the future, but should also be realistic for the market, area, and size of property. Failure to price your furnished rental competitively could lead to extended vacancies, lower overall returns, and a poor property investment.
Some options to consider
Before you decide to furnish your property or remove existing furnishings, talk to your property manager or a real estate expert. Certain areas or markets may be more agreeable to furnished homes. You may also want to offer unfurnished, semi-furnished, or fully furnished options to prospective tenants. A tenant may want to bring their own bed but be happy with your living room furniture.
If you do decide to leave your property furnished, be sure to take a thorough inventory of your items, including photographs. You do not want to end up in a war with a former tenant over who owns what or who damaged what.