To furnish or not to furnish is a dilemma all landlords face before renting out an apartment for the first time. In most cases, it is a matter of personal preference, and the final decision is based on several considerations such as the target market and area of investment.
Renting is an extremely popular method of living, as it allows people flexibility and with the rising costs of owning a home, this is a suitable alternative.
A furnished apartment can, in general, prove quite advantageous to the landlord as well as the tenant. Listed below are 10 reasons to consider furnishing the apartment before renting it out:
Targeting Short Term Tenants
Short-term leases and tenants can prove more lucrative than long-term ones. Short-term tenants need a place that is ready for immediate occupancy. They either don’t want to take on the hassle of purchasing furniture for the flat or house that they don’t intend on living in for a long period of time.
Filling Vacant Spaces More Quickly
A fully furnished apartment appeals to a broader tenant base. From students, and immigrants to young professionals, different types of tenants prefer a furnished apartment for various reasons. Because of higher convenience, comfort, and tenant satisfaction, such apartments are more likely to get positive word-of-mouth referrals and reviews online. Since furnished apartments have much in their favour, they’re likely to fill up more quickly.
Rent
It’s easier to stage strategically furnished apartments. Such furnished apartments will set a positive first impression during viewings.
A slightly higher rent is often advertised in the case of well-furnished homes.
Higher Security Deposit
Requested deposit may often be higher, to cover the event that tenants break the contract and leave the rental property in disrepair. The higher security deposit will be able to cover all, if not some of the charges incurred for repairs.
Reducing Chances of Damage to Property
The shell of the flat will incur less damage, as it takes out moving large pieces of furniture into the apartment. This means fewer scratches on the wall, and fewer chipped corners to deal with.
Saving on Taxes
You can claim tax relief on furnishes that fall under domestic items. This includes items such as beds, sofas, curtains, carpets, fridges, and crockery. However, it is important to note that these items must be purchased to use solely for the rental property by the tenants. And if you are replacing any of these domestic items, they cannot be kept or in use on the property. There are also wear and tear allowances for these properties.
Gaining Competitive Advantage
Market differentiation is key here as landlords are appealing to a certain target market that needs this type of property. In this case, it is creating a rental property that appeals to short-term tenants or people looking for a home that comes fully furnished. A fully furnished home aids the process of home staging – which is more appealing to tenants, as they will be able to visualize the space as their own.
Switching According to Market Conditions
Fully furnished apartments allow for slim pickings, as the landlord is geared towards new or short-term tenants. If the landlord is looking for long-term tenants, or if the market is overflowing with people seeking long-term living arrangements, they can opt to use the furnishings for staging purposes and enlist a storage facility to hold the furnishings for other properties they may own.
If that is not the case, then the landlord may have to consider selling and repurchasing updated furnishings at a later stage. Furniture stores are always stocking the latest and fashionable items that will be perfect for showcasing the property.
Attracting the Right Kind of Tenants
As mentioned previously, fully furnished properties will see a higher rent and security deposit, this means that potential tenants need to be willing to pay for these facilities. It will also attract tenants who will be willing to take care of the features that the apartment comes with.
Improving Tenant Experience and Apartment Reputation
Tenants are willing to pay extra in rent and deposit as they will have the satisfaction of convenience. This allows flexibility for tenants, and there is less of a commitment to be tied down to a space.
It makes marketing better and appeals to certain demographics, and it will add value to the property. Attractive to a younger market.
Final Thoughts
When it comes to deciding on whether to furnish an apartment or not, it boils down to the market the landlord is targeting. With the rise in digital nomads and people opting for convenience, furnishing an apartment is beneficial to both the landlord and the tenant. The tenant will have a ready-to-live-in flat, while the landlord can look forward to a wide variety of clientele to pick from and a higher income when they lease out the property.
