While doing market research, you’ve probably stumbled upon the occasional furnished property listing. If you’re new to property management, you may be wondering, “Is this something I should be doing? Should I consider furnishing my properties before listing them?” While this question needs to be addressed on a case-by-case basis, the general rule is that you should not furnish rental properties. Here’s why.
The Disadvantages of Furnished Rentals
To start off, more stuff means more management and liability, as well as a higher up-front cost to you. You have to invest in the cost of the furniture right away, hoping that tenants keep it in good shape for as long as possible so that you don’t have to fix or replace it—and that doesn’t always happen.
Just like the properties themselves, furniture needs to be cleaned, repaired, and/or replaced in a timely fashion. Buying and replacing new furniture is expensive, and tenants aren’t always the best at keeping things clean and functioning. Children, pets, or even adult guests are prone to breaking, soiling, or damaging pre-existing pieces, even if it’s just by accident. Not to mention, if you’re furnishing a larger property, the costs can start to add up at an alarming rate.
Finally, consider who would be most interested in a furnished rental: a person who, for whatever reason, can’t (or doesn’t want to) invest in a couch, table, etc. This includes the obvious categories of college students and people who travel for short-term business assignments. It can also include people who are making big moves (cross-country, if not international) who opted to sell most of their belongings rather than travel with them, or people who are new to town and plan to buy their own place after figuring out their job and long-term life plans.
More often than not, these individuals are looking to rent on a short-term basis. This will likely lead to higher tenant turnover, which you want to avoid as a landlord.
The Appeal of Unfurnished Rentals
On the other hand, long-term rentals offer the security of long-term tenants. Consider the tenant’s perspective again: Unfurnished properties appeal to people who are ready to settle in and stay a while. This means decreased tenant turnover for you (and more money in your pocket). Also, since most people on the market are searching for an unfurnished property to bring their personal belongings and personalized taste into, it’s easier to find tenants. A wider pool of applicants means more choices for you and a better chance at picking out the best tenant.
Add in savings from the cost of buying and maintaining furniture, and it becomes clear that unfurnished rentals are the safe choice for most landlords and tenants.
But again, this decision should be made on a case-by-case basis. In certain situations, furnishing a property may be worth it. If you’re uncertain about what to do, consider speaking to a property management team like SmartEgg for guidance.
The SmartEgg Difference
Excited about investing, but not sure where (or how) to start? We’re here to help.
At SmartEgg, we are committed to helping make sure that you have all the tools and resources you need to make educated, profitable investments from the very beginning. We’ve made it our mission to make your life easier by assisting you with our extensive real estate experience and resources.
We take our goal of equipping women in Austin, Texas (and the surrounding areas) seriously, and we’ve centered our company on providing all of the educational tools and resources you need to reach financial fluency. Whether you’re a beginner or a multi-property investment maven, we want to help—and cheer you on along the way.
Perfect Your Investment Strategy & Get Money Smart – Schedule Your SmartEgg Consultation Today