To Furnish or Not to Furnish your Rental Property

15/5/2019

This gets asked a lot.

A few months ago, I was reading “The Subtle Art of not giving a ^%$” and something stuck, not quoting word for word but the message came across clearly, the more we have in life the more we have to maintain, the more we have on our plate and more to manage. This really applies here as well. Also, well worth a read!

At several stages over the years where managing furnished properties I’ve had to call owners about replacing or upgrading furnishings. I remember one time where a landlord was outraged, they had to replace a vacuum cleaner that had stopped working, from memory to appease them off to The Good Guys I went to get a new vacuum cleaner. I always say though, the more you leave within a property the more responsibility and upkeep costs you have as a landlord and that goes for anything you provide with your rental property at the outset.

Leasing furnished properties is really the exception and not the rule, furnished properties being offered with Residential leases are not come across by on the regular.

Believe me the costs do come, a Fridge that’s worked fine for years will need new seals or re gassing, a chair may break and so on.

So if you really do want to lease your property furnished or with any inclusions that’s something to be aware of. As an agent the upkeep and management of a furnished property is a lot more involved, thorough inventory reports are needed to be provided with the properties for one thing and maintenance will be more regular.

From a tenant’s point of view, it’s quite clear cut, a tenant will either want a property furnished or unfurnished.

If you as a landlord want to leave a one-off appliance, most commonly a fridge or washing machine then your Rental Listing should indicate that and prospective tenants told by the agent when viewing the property. That one-off inclusion then just needs to be listed on the In going condition report and photographed- and the responsibility to maintain will be on the owner of course.

Interestingly, In my experience owners are relocating and don’t have use for their furnishings and are not purposely furnished for leasing, so the key is here, removing any personal and precious items. I once appraised a property in Redfern that was complete with Antique and beautifully details furniture and bric a brac, I had to walk away from that one sensing the owners attachment to their pieces.

Want to lease your property furnished? Here’s some pro’s and cons’

PROS

Owners are likely to save time, money and effort. i.e.  removalists and ongoing storage

If it presents well then it can help when leasing vs presentation of a vacant property

Rent achieved (maybe) slightly higher, dependant on overall presentation and quality of included furnishings

CONS

Owner is responsible to maintain anything included with the property, furniture and appliances

Furnishings are subject to wear and tear and upgrades and replacements will be needed

Prospective tenant pool is decreased, more tenants demand long term and unfurnished property

Increased change over in Tenants, tenants seeking furnished properties typically want shorter leases and not long-term tenants. They maybe on short term work contracts, travelling etc.

Agent costs may be slightly higher due to increased initial and ongoing work required

You will need to be flexible; some tenants will want to negotiate what stays and what goes

The time frame in which to lease the property is typically longer, although this can be seasonal and dependant on your pricing and overall offering

TIPS

-Be open to un-furnishing or partly if the ideal tenant comes along and present this option in your advertising if you want to make that available to prospective tenants.

-Find the right agent that wants to help with your furnished property and knows what they need to cover in terms of documenting the tenancy and properties condition and inclusions. Someone that already manages furnished properties already.

-Furnishings and overall colour scheme will have to be neutral with some key points of interest such as art, great rugs and homely touches. A complete IKEA display suite might not attract tenants.

While I don’t absolutely love or loathe working with furnished properties and only manage 3 furnished properties, there is more work involved, more to think about and always a smaller target market looking for furnished properties. As an owner you need to decide if your property and your needs will align with the that target markets needs and wants.

I also feel that it’s in the owners best interests to have a longer lease, less to maintain and therefore less ongoing costs when considering that there are turn over of tenants and therefore agency costs and the usual risk of vacancy between tenants.

Patience and persistence is key, to find the right tenants and my main goal is to find tenants that will sign a 6 or 12 month lease and plan to stay on for a reasonable amount of time. The main reason being to prevent a cycle of turn over that’s costly to the landlord and at the same time we’re preventing wear and tear and unsteady or unpredictable stream of income.

Lastly though I think some properties are better suited than others to be leased furnished so worth getting an agent through that can assesses the pro’s and con’s of your particular property.

Have I missed anything?

A 🙂