Property owners have many decisions to make when putting a rental on the market. Whether to offer it furnished or unfurnished is just one of the questions that comes up.
There are pros and cons to both options and landlords should weigh them up when deciding which way to go.
Finn Simpson from Belle Property in Dee Why explains that while most rental properties across the country are classified as “unfurnished”, they still come with fixed items such as cabinetry, kitchen benchtops, blinds or curtains, bathroom vanities, light coverings and fixed appliances like ovens and air-conditioning units.
From there, however, there’s a clear distinction between a furnished or unfurnished property – and what can be charged for each. Let’s take a look.
So, what is a furnished property exactly? Finn says it’s a property that not only comes with fixed items like blinds and lights but also non-fixed items such as couches, beds, tables, chairs and non-fixed appliances, like washing machines, dryers and fridges.
What’s included differs from property to property, but generally speaking, a furnished property has everything someone would need for everyday living.
Finn says some furnished properties also come with soft furnishings, too, which refers to rugs, cushions, bed covers, wall art and plants. Others don’t.
The main benefit of offering a property furnished is financial. That’s because a furnished property appeals to a specific kind of tenant, which often means property owners can ask for more rent, Finn says.
But conversely, furniture may have to repaired and replaced over time, as tenants may not look after it and this can be costly.
Furnished properties tend to appeal to a certain demographic, such as professionals on short contracts, who also look for short-term leases.
So, if that demographic is strong in the area, it makes sense to meet it, Finn says.
As the name suggests, an unfurnished property doesn’t come with items required for day-to-day living, like beds and white goods.
The vast majority of rental properties in Australia are offered unfurnished, as the tenants in the area have their own furniture.
Finn says there are few risks with offering a property unfurnished, which is why it’s a popular choice among property owners.
One con is potential damage.
“Moving furniture in and out can cause damage to the property, like scratches to walls, floorboards and door frames,” says Finn.
But it’s nothing like the cost involved with furnished a property.
The main most reason landlords “go unfurnished” is because the local market demands it, Finn says.
If the majority of tenants in the area are long-term renters looking for a “home”, unfurnished is the way to go.
“However, if the majority of tenants in your market prefer short-term leases or are more transient, they may show no interest in an unfurnished property and so the property could spend too long being vacant,” he says.
For a property owner, it’s much simpler to offer a property unfurnished.
Furniture doesn’t have to be purchased and maintained, there’s no need for an inventory and time-consuming condition reports after each tenancy and in most areas, unfurnished appeals to the most potential tenants.
The question of whether it’s best to offer a property furnished or unfurnished is a complicated one. Finn says the decision depends on where the property is located and the investor’s goals.
“In every case, the trick is to appeal to the widest cross-section of tenants in your market,” he says.
If the property is in one of Australia’s larger metropolitan or regional areas, and the goal is to have a long-term tenant, landlords will have more success offering an unfurnished property.
“This is because most of the tenants you are targeting will have their own furniture,” says Finn.
He explains that furnished properties almost always go hand-in-hand with short-term leases because it doesn’t make sense for a tenant to go through the hassle of moving furniture in and out for a three-month lease.
If a property is in a more transient location, like a CBD or an area like far-north Queensland, or the goal is only to offer a shorter-term lease, landlords should look to offer their properties furnished, Finn adds.
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