As landlords try to entice quality tenants to sign rental agreements, many debate the merits of a furnished versus unfurnished apartment. There are many advantages to offering a furnished or semi-furnished rental property, such as higher rent, but there are also disadvantages.
The best thing a landlord can do is evaluate the pros and cons of a furnished rental and see how it fits the needs of the tenants in the area.
What is a furnished apartment?
A furnished apartment comes with all the furniture a person would need to live comfortably. Rents for a furnished apartment are usually higher than for a comparable unfurnished apartment, as items such as sofas, tables and chairs depreciate in value.
- A living room should have at least a couch, a table and a lamp and perhaps a coffee table or bookshelf.
- A bedroom should have a bed, a nightstand with lamp, a dresser and perhaps a desk.
- A dining room should have a table and chairs.
- A bathroom should have a shower curtain, a trash can and a floor mat.
- A kitchen should have utensils, dishes, glassware, pots and pans, and all appliances.
What does “fully furnished” mean ?
A fully furnished apartment means that someone can move into the apartment and live there without purchasing any items for the apartment. This does not include food, perishables or personal items.
However, a tenant must be able to walk in with a suitcase and feel ready to live in the apartment. Items such as toiletries, dish soap, and hand soap can be provided in advance but are generally the responsibility of the tenant.
What is a semi-furnished apartment ?
The term “semi-furnished” can be used to describe a range of rental properties, from almost bare to almost fully furnished. In general, a semi-furnished apartment has the basic large pieces of furniture – sofa, bed, dresser, table and chairs – and fewer small pieces of furniture.
You may not expect to find kitchen utensils in a semi-furnished rental, whereas they would be present in a fully furnished apartment.
3 advantages of renting furnished apartments
Below are the advantages of furnishing your rental property:
Price difference between furnished and unfurnished
In most cities across the country, furnished apartments cost more to rent than unfurnished apartments, allowing landlords to charge more rent. Many tenants find this worthwhile because it saves them from having to buy furniture.
The price difference varies considerably from city to city, and in many cases, furnished rental agreements are shorter than unfurnished ones. This is because many people looking for a furnished apartment are looking for temporary housing. Typical rents for short-term housing are higher, as the landlord must offset the costs associated with the increased vacancy created by shorter lease terms. It is not uncommon for a furnished apartment to rent for 20-40% more than an unfurnished apartment. For short stays of less than a month, this figure will increase even more.
Higher security deposit
Landlords may also require a higher security deposit for fully furnished apartments. For example, landlords can only ask for a certain maximum deposit amount for unfurnished apartments, but a higher maximum amount for furnished apartments. This is to protect the landlord by covering the cost of replacing or repairing damaged furniture.
Predictable target market
Because furnished apartments cost more, landlords automatically attract tenants who can afford it – often young professionals, young families or students who have not yet accumulated their own furniture. If the rental property is in a college town or more urban area, chances are there are many potential tenants looking for such a rental and a landlord can capitalize on this market.
3 disadvantages of renting furnished apartments
While there are many advantages, there are some disadvantages to offering a furnished rental:
Increased risk of damage
Furnishing an apartment means that there is a greater risk of damage, which means a greater financial burden if tenants do not take care of the property and the furnishings in it. Repair and replacement responsibilities increase with a furnished apartment, as landlords must pay attention to actual damage and stay ahead of normal wear and tear. Because furniture eventually wears out, landlords must plan for replacement over time to keep the rental attractive.
Higher turnover
Another disadvantage of renting furnished property is that tenants often tend to enter into short-term rental agreements. Young professionals, students, singles, young families, and others who do not own many physical assets typically seek out furnished housing because they are more likely to be transient, due to job transfers, school completion, or life changes.
Storage Fees
Landlords must arrange storage if the furniture cannot remain in the unit. For example, if the landlord agrees and the tenants want to use their own mattress and bed frame, the landlord is responsible for moving the existing bed and storing it. Similarly, if the landlord wants to paint or re-carpet between rentals, the landlord must make arrangements to move and/or store furniture so that work crews can do the job.
In the end, the choice to rent a furnished or unfurnished property really depends on the target market. Since students and young professionals tend to rent furnished properties, while couples and families prefer unfurnished units, each landlord must decide which condition will attract many qualified tenants.
