Should You Furnish Your Rental Property?

As the housing market boom, owning a rental property is the golden ticket to passive income. But how much more can you squeeze out of your cash cow while keeping expenses low?

Choosing between furnishing and not furnishing your rental property can be a hard decision to make, which has the potential to entirely change your market offer, price point, and tenant turnaround. Here are the factors to consider when trying to optimize your rental property in today’s Renter’s Market.

Understand Your Rental Offer

Depending on what kind of rental you are making available on the market, it might make more or less sense to invest in furnishing your rental property. For example, if you list your home on websites such as VRBO and Airbnb, furnishing it is essential - and expected!

Other short-term rental types - the ones that range from a few weeks to a few months - also will require you to furnish your property. 

But when it comes down to long-term rentals, or those leases that last for a year or longer, the answer to your question might not be so straightforward. 

Long-term tenants might not want to feel like living in a hotel room, and they might prefer to make your property their home. But don’t forget that nearly half of the tenants between 25 and 34 years will only stay in the same accommodation for less than two years! Ultimately, as well as your market offer, it is essential to look at how the market is changing and what the tenants in your target demographic are looking for.

Making It Work: Affordable Home Furnishings And Financial Help

Many property owners choose to offer unfurnished rentals because of the cost and effort involved in furnishing them. After all, furnishing a property with essential amenities can cost between $2930 and $5450. And the price can be as high as $4100 to $7600 if you wish to add nonessential touches to the necessary amenities. 

But with the right strategy, furnishing a property does not have to be expensive.

For example, you could opt to invest in stylish but highly affordable home furnishings from brands like Overstock, Home Depot, and Ikea. 

Alternatively, if you want to create a luxury rental space for business travelers or affluent families, you might consider the low-rate personal loans from SoFi. Thanks to this alternative, you won’t have to choose between tapping into your savings or making up to 30% more on your monthly rental income.

Fully-Furnished vs. Semi-Furnished Rental: What Are Your Options?

Generally, furnished rentals are those properties that come with all furniture, amenities, and appliances needed for tenants to move in straight away and live comfortably. However, depending on the kind of property you are managing, you won’t have to choose between renting an unfurnished property and a fully-furnished one!

While a turn-key solution with beyond-necessary amenities such as coffee tables and details like artwork is perfect for short-term rentals, you can offer a semi-furnished property to your long-term tenants. In this case, you’ll provide the necessary appliances and furniture, which allows a long-term tenant to move in immediately but offers a greater customization potential. 

The Pros and Cons of Furnishing Your Rental Property

Furnishing a rental property might seem like an unnecessary expense at first, but this choice comes with its fair share of unmissable benefits. These include:

• The possibility to increase your monthly asking price by 15-20%
• A quicker turnaround of tenants 
• The potential for tenants to move in quickly can be a decisive competitive advantage for some! 
• The possibility of deducting the cost of some furniture from your taxes as being part of the cost of running a business
• Protecting your property from the damage that several moves and transport of your tenant’s furniture can cause
• The ability to charge a higher deposit - up to three months’ worth of rent
• The opportunity to cater to a particular type of tenants or guests, such as business travelers or families

Furnishing a rental property can also come with downsides. For example, the increased turnaround might not offset the cost of furnishing your flat. Or if you might decide to switch from a short-term to a long-term lease and lose out on tenants who prefer to furnish their own home. 

Choose the correct option based on the type of rental you offer and your desired price point!