Renting a furnished investment property longer term (i.e. 1 year or more) doesn’t really attract a tenant any faster or offer a greater rent as apposed to a short term lease. In this situation you may be over spending. A longer term tenant may already be well equipped with their own personal belongings and contents.
In a summary here are the differences between a furnished investment property and unfurnished:
Unfurnished investment property
- You are saving $5,000-$20,000 on contents, depending on the size of the property
- You may have a wider selection of tenants interested in living in your property
- The tenant has flexibility to design the home as they wish
- The landlord doesn’t have to worry about the wear and tear of furniture
- The landlord is likely to have less maintenance issues with repairing white goods, furniture and appliances
Furnished investment property
- The rental income maybe higher
- The property will often attract a younger tenant
- You may increase your tax destructibility with the depreciation component
Renting a furnished investment property can provide many benefits, but it’s only worth the extra investment if the initial outlay and maintenance costs are offset against the rent. Overtime replacement costs may be required (i.e. couch or television) so you will need to progressively increase your rent to continue offsetting these inevitable expenses.
Take note to the location of your property, the type of tenant you are seeking or likely to receive and identify if they want a furnished property. A family is likely to already have furniture, but a young couple may not.
Always remember that any furnished property must be suitable for your tenants. There is no point spending a lot of money on designer furniture if you have unreliable or messy tenants.
In summary “You should only furnish a property if it will be more profitable in the long run”.
If you’d like to discuss your investment property needs, please don’t hesitate to contact us at your earliest convenience.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
May 2020
