Offering a Furnished Rental Versus an Unfurnished One

By Kailey Walters on October 21, 2019

When you’re deciding what kind of rental to offer, there are a lot of different factors to consider. One is whether to offer a furnished rental or an empty one to your tenants, which is a big decision that could potentially make or break your rental offering.

In making this decision, it’s important to weigh the pros and cons. What will a furnished rental do for you? What will an unfurnished one do for you? Ultimately, which one is more profitable? Posing these sorts of questions to yourself and understanding what is involved in either option is important and will help you make the best decision for both you and your renters.

via Pexels

What is the standard for furnishing an apartment?

One of the first, most important things to consider is what kind and how much furniture is necessary to provide in a rental.

The truth is, there is no universal answer. The furniture you provide is really up to you.

However, it may be helpful to think about what an unfurnished rental already comes with. That usually includes basic appliances such as a refrigerator, oven, microwave, and range top. Some may also offer dishwashers and laundry machines (washer and dryer).

That leaves you to think about what furniture you could possibly include in a furnished rental unit — perhaps beds, dressers, tables, couches, and the like. Below is a list of some common items you might find in a typical furnished apartment:

  • The living or common area may include a sofa, table, perhaps even a coffee table, or bookshelf.

  • The dining room should come with a dining table and chairs.

  • A fully-stocked kitchen should already have cookware (such as cutlery, dishes, pots and pans, and appliances.

  • A bedroom should have a bed, a bedside table, a desk, and a dresser.

When the apartment unit is fully furnished, tenants should be able to move in and continue to live there without getting anything new for the apartment itself.

Who is most likely to rent a furnished apartment?

People who don’t already have furniture of their own, or who are looking to rent for a short period of time, are most likely to rent a furnished unit. This might include college students, who may be looking to rent for a short time (such as the duration of a semester or two) while they’re at university or first-time renters, who may not have had the time or opportunity yet to purchase their own furniture.

What are the pros of offering a furnished rental?

A furnished unit is more appealing to renters who don’t already have their own furniture.

For potential renters who don’t have their own furniture on hand already, a furnished apartment is attractive. After all, if you provide their unit with beds, sofas, tables, chairs, and possibly even more, it’s a very appealing package deal. As a result, advertising your furnished rental will likely go a long way in bringing in interested prospective renters.

You can charge higher rent.

Since you’re providing the furniture, that means you have the opportunity to charge your tenants higher rent. A well-furnished unit can have a rental price of up to 25 to 75% more than an unfurnished unit, and the difference between an average furnished and unfurnished rental is about $400. That’s a pretty significant difference in price, which can add up to a lot over the course of several months to a year — and demanding a higher price should at least cover the cost of what you spent on the furniture you’re providing. That’s definitely something worthwhile to keep in mind if you do decide to offer a furnished apartment.

You may get tax benefits.

Since you’ll be spending money on expensive furniture, you may be able to claim back part of the value of that furniture against your tax bill as a five-year depreciable asset.

You will attract a greater number of short-term renters.

As mentioned previously, furnished apartments may be particularly attractive to people who are planning to stay for a short amount of time — as in 6-12 month leases. That’s because short-term renters don’t want to go through the stress and hassle of moving their own heavy furniture in and out of the apartment if they’re only staying for a short while. If you’re looking to increase your number of short-term renters, this is great news for you, and you should consider offering furnished units to attract more short-term tenants.

You will be able to rent out the unit quickly.

In a similar vein, a furnished apartment will also be appealing to short-term renters because they are looking to rent right away. For example, first-time renters may find it easy to move in quickly because they won’t have to spend time and effort thinking about the details of buying their own furniture. Also, if they’re only planning to stay for a short amount of time, they likely won’t spend too much time deliberating whether or not they want to live there since it won’t be a long-term commitment.

You’ll get a good reputation among prospective renters.

This one may be a little difficult to quantify, but you’re sure to notice it when you’re interacting with potential renters. Generally, people appreciate when things are given to them — so even though they’ll be paying a higher price for a furnished apartment than an unfurnished one, they will be sure to appreciate the convenience of having furniture already when they move in. (You may be in particularly good favor with some renters who enjoy the style of furniture you’ve chosen!)

You can reuse furniture.

Given that your furniture doesn’t become damaged or suffer from wear and tear over time, you can definitely reuse it for different renters. Doing so will confirm that you’ve made a good investment and that it will last you for a while, serving both your needs and the needs of your future tenants. And, of course, reusing furniture is certainly much easier than having to buy new pieces every six months or every year.

What are the cons of offering a furnished rental?

You will attract fewer long-term renters.

On the flip side of attracting more short-term renters is that you will likely, at the same time, attract fewer long-term renters. This can turn out to be a negative thing if you are attempting to gain more long-term renters.

There will be higher turnover.

Since many furnished rentals are snapped up by short-term renters, there will inevitably be a higher turnover. This could turn into a stressful situation for you, especially if you’re scrambling to get through a process (or many processes at the same time) to prepare the next tenant to move in.

You will have to pay for damage and storage of furniture.

While on one hand, it’s certainly a good thing to invest in furniture that you can keep for a long time, on the other hand, your furniture can sometimes get damaged by tenants. If you don’t have insurance, you’ll end up having to pay out of pocket to replace the furniture so that you can continue to provide pieces for future tenants. You might also need to pay for regular safety checks for electrical items. As a result, offering furnishings can be a bit risky at times, as you never know what your tenants might do (either accidentally or purposely) that damages the furniture.

Even if your furniture does not become damaged, you do still have to find a way to store it when it’s not in use. This can create an extra hassle for you to deal with, especially when it comes to locating an affordable and large enough storage space for all the furniture pieces you have. For this reason, the storage and potential damage to your furniture are important factors to consider in making your decision.

Who is most likely to rent an unfurnished apartment?

People most likely to rent an unfurnished apartment are those looking to stay for the long term — so probably longer than a year’s lease. If the apartment is unfurnished, they will have the opportunity to bring in their own furniture, decorations, etc. and personalize the space so that it feels like home for them. Doing so is a lot easier when they can live with their own furniture instead of with something generic that is already provided.

What are the pros of offering an unfurnished rental?

You won’t need to get furniture insurance.

This one is pretty simple: If you don’t provide any of the furniture that the tenants bring in, you won’t need to get furniture insurance. After all, you will not be held responsible for any personal furniture or other items that the tenants bring in — so you can relax a little bit here and save on the money you would have used for furniture insurance.

Longer leases means less tenant turnover.

As mentioned before, those who want to stay in the apartment unit for a relatively long time are most likely to rent an unfurnished place. As a result, longer leases translate into less tenant turnover — meaning that, in the process of getting the rental property ready for the next tenant to move in, you won’t have to get stressed or rush ahead with paperwork.

Tenants get to make the space their own.

People just love personalizing things for their own needs and desires, and an unfurnished apartment is one of those things that offer renters the freedom to do with the space what they want. When tenants bring their own furniture, they can arrange it and decorate as much as they want and how they want, thereby giving them more freedom and flexibility to do whatever they feel like.

There’s less maintenance involved on your part.

Since you won’t be the one providing the furniture or any other items, you won’t have to provide quite as much maintenance as if you were offering furnished rentals. After all, if the tenants bring their own furniture and their own property, that’s their responsibility to take care of — not yours.

via Pexels

What are the cons of offering an unfurnished rental?

You won’t be able to charge as much rent.

Compared to the price you can charge for a furnished rental, you won’t be able to charge quite as much for an unfurnished one. This is only fair to prospective renters, who will be footing the bill not only for monthly rent, but also for their personal furniture expenses.

You won’t know how the tenant’s furniture will hold up.

Because you won’t have much control over what kind of furniture your tenant uses, allowing them to bring whatever furniture they want can potentially be risky at times. As a result, you can’t always guarantee just how safe your tenants’ furniture is or if it will do any damage to your property.

Overall, it’s crucial that you weigh all the pros and cons and evaluate your goals before making such a huge decision. Are you aiming for more short-term or long-term renters? Is it worth it for you to invest in furniture? Considering these and other related questions can help you figure out whether you should offer a furnished or unfurnished apartment to prospective tenants.

By Kailey Walters

Uloop Writer
Stony Brook University

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