Property owners frequently face difficult choices regarding extra amenities they provide to their tenants. Utility-inclusive rental alternatives, such as heat, energy, HVAC, water, etc., have long been key differentiators.
Today, more niche markets have developed to meet more sophisticated renter needs, thus property owners need to adapt and provide new services to meet these shifting market demands. Apartments that are completely furnished are one such market.
While you may not usually view renting a furnished home as your first priority, it’s a crucial decision that can affect the kind of tenants you attract.
What Is an Unfurnished Apartment?
Despite what the label "unfurnished" implies, there are several things that are typically anticipated in an unfurnished rental property. These consist of:
- Kitchen fixtures such as sinks, countertops, cabinets, and any other built-in equipment
- Appliances such as refrigerators, freezers, ovens, and washing machines
- Bathroom fittings such as showers, washbasins, and sinks
- Various forms of flooring, such as carpets
What Is a Furnished Apartment?
When an apartment is fully furnished, a resident can settle in and start living there without having to buy any furniture.
While initial supplies of things like hand soap, dishwashing detergent, and toiletries may be made available, these things are usually the renter's obligation moving forward.
What Is a Semi-furnished Apartment?
A variety of rental homes might be referred to as semi-furnished. Generally speaking, a semi-furnished apartment contains essential, bigger furnishings such as a couch, bed, wardrobe, table, and chairs.
The Pros of Furnished Apartments for Landlords
1. A Furnished Unit Means Greater Rent
Simply put, people are often prepared to pay more for convenience, hence furnished flats are more expensive. To determine just how much more you can charge, you must undertake a market study or survey of your region.
Strive for a reasonable monthly charge that is high enough to pay for the extras offered but not so high as to make the apartment unaffordable to prospective tenants.
2. A Furnished Unit Also Means a Greater Security Deposit
A fully furnished apartment may require a larger security deposit. As the landlord, you need to ensure there is money available to repair a damaged toaster oven or ripped sofa upholstery.
To further secure your property and narrow any ambiguities for both you and the tenants, you can think about incorporating an addendum in the lease.
3. Furnished Units Reduce the Possibility of Property Damage
By not having to move big, heavy furniture within your unit, you’ll notice a decrease in wear and tear on the property’s walls, floors, entrances, and trims. This way, you’ll avoid having to repair any minor damages, saving both money and time.
4. Offering Alternatives Will Attract Various Tenants
Supplying a furnished property will attract a wider range of tenants. If it's challenging to keep all of your similarly furnished flats occupied in one go, think of furnishing one or two of them. Apartment furnishing, if done correctly, can help expand the market for vacation rentals.
5. Provide a Unique Approach to Rent Out Small Spaces
People frequently struggle to visualize how their belongings will fit into an apartment that’s small or oddly shaped. Renters will be much more drawn to your unit if you take the effort to choose the appropriate furniture for it.
6. Staged Units Are More Enticing
You have a better chance at visual marketing when you select furniture that goes well with the residence. People can visualize how their lives might be like living in one of your units, as furnishings enhance the attraction of the unit.
The Cons of Furnished Apartments for Landlords
1. Rising Prices and Continuous Costs
The cost of purchasing home furnishings and appliances, together with continuous upkeep and repairs, can be substantial for property owners, even if furnished rental properties can attract greater rent.
Any goods that break down or degrade due to normal wear and tear must be replaced by the landlord immediately. The end result is that you might have to pay more for repairs and maintenance, which might more than offset any increase in the asking rent.
2. Higher Insurance Premiums
Unfurnished rental properties typically require the tenant to secure contents insurance for their own possessions. For furnished properties, landlords are responsible for insuring the unit’s furnishings.
This results in an increase in yearly insurance costs when you rent out a fully furnished property. This is another expense you must account for when calculating your overall profits.
3. Furnished Apartments Attract Short-Term Leases Only
A short-term lease is another important quality that tenants seeking furnished apartments frequently look for. Many landlords who own furnished apartments offer leases that are shorter than a year or even offer month-to-month leases.
For some tenants, furnished apartments are sometimes seen as temporary lodging during a period of change or transition. Beyond tourists and students, persons who’ve just experienced significant life changes frequently prefer these types of units.
Even though you'll be able to receive a bigger monthly premium, you'll have to put in more effort and rent out your space more frequently.
Closing Thoughts
The target market will ultimately determine whether to rent out a furnished or unfurnished house. Each landlord must choose which option attracts the most eligible renters.
Uncertain about the best rental strategy for you? Are you trying to optimize your rental revenue in Hampton Roads, Virginia? If so, RentEasy is the only place you need to look!
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