Our investors often ask us whether they should lease their property furnished or unfurnished. There is no right or wrong answer, it comes down to who are your target tenants, how you want to use the property, the location and the current demand for properties in your area. Before we get into the pros and cons of furnished or unfurnished, let’s look at the different ways a property is considered furnished:
- Fully furnished and equipped – everything, including things like pots, pans or cutlery, is provided
- Fully furnished – the rental property has all the furniture it needs, beds, couch, tv, fridge etc.
- Partly furnished – the rental has some furniture, such as a sofa, a table and chairs.
- White goods only – Some or all white goods are provided.
- Unfurnished – No furniture or appliances are provided, the tenants supply it all.
Cons of a furnished property: Whilst you will be able to charge higher rent for a fully furnished property you may find; You have a higher turnover with corporate tenants Monitoring, managing furnishing inventory and worry about replacing faulty products. You are responsible for replacing or fixing items quickly if they are not working. Every 3-5 years, you’ll need to update the furniture and styling, which again is costly.
Pros of an unfurnished property: You can sometimes charge a premium for fully furnished properties, depending on the demand. Letting a furnished property allows you to increase depreciation deductions. If your property is located near the CBD and is nicely furnished, it can attract higher-paying professionals as it better suits their fly-in, fly-out lifestyle.
In conclusion, the decision to lease a property furnished or unfurnished depends on various factors that are unique to each situation. By understanding your target tenants, property usage, location, and local demand, you can make an informed choice that maximizes your investment’s potential. Whether furnished or unfurnished, both options offer distinct advantages, and the right decision ultimately aligns with your goals and preferences as an investor. Speak to your friendly property manager today if you are considering a furnished or unfurnished property.
