Offering furnished rentals can be a lucrative business strategy for landlords. After all, furnished rentals can be more attractive to prospective tenants, potentially reducing vacancy rates. However, that doesn’t mean there aren’t any disadvantages. Today, we’ll go over some of the pros and cons of offering furnished rentals.
Contents of This Article:
- What Is a Furnished vs. Unfurnished Rental?
- Pros and Cons of Offering Furnished Rentals
- What to Include in a Furnished Rental
- How to Protect Your Furnished Rental Property
- Protect Your Rentals With Professional Management
What Is a Furnished vs. Unfurnished Rental?
A furnished vs. unfurnished rental refers to different types of rental properties based on the level of furnishings and amenities provided to tenants. That said, the choice between a furnished or unfurnished rental depends on various factors, including tenant preferences, the rental market, and the landlord’s preferences and business strategy.
Instead of fully furnishing a rental, some landlords or property managers in Northern Virginia opt to include some basic necessities, making it a semi-furnished rental. Let’s go over some of the characteristics of a fully furnished, unfurnished, and semi-furnished rental property.
Fully Furnished Rental Property
A fully furnished rental property comes equipped with all the essential furniture and amenities needed for a comfortable living situation. This typically includes basic furniture, bedding and linens, kitchen utensils and cookware, and some home electronics.
Unfurnished Rental Property
An unfurnished rental is a property that does not come with any furniture or major appliances.
Typically, an unfurnished rental includes basic fixtures, appliances, and a blank canvas for tenants to furnish with their belongings.
Semi-Furnished Rental Property
There’s also a category in between, where a property is partially furnished. This might include some essential furniture pieces but not a complete set.
Pros and Cons of Offering Furnished Rentals
Offering furnished rentals comes with its own set of advantages and disadvantages. Here are some of the key pros and cons.
Benefits of Offering Furnished Rentals
- Attracts a Larger Tenant Pool- Furnished rentals appeal to a broader range of tenants, including students, professionals on short-term work assignments, and people in transitional periods.
- Higher Rental Income- You can charge a higher monthly rate for furnished units, potentially leading to higher rental income than unfurnished rentals.
- Shorter Vacancy Periods- Furnished rentals tend to have shorter vacancy periods as they are ready for immediate occupancy. This can help maintain a steady rental income with fewer vacancies.
Disadvantages of Offering Furnished Rentals
- Higher Upfront Costs- Furnishing a rental property requires a significant initial investment, including furniture, appliances, and decor costs.
- Potential for Damage or Theft- There is a risk of damage to or theft of the furniture and other items in the rental unit. Even with a security deposit, it may not cover all potential losses.
- Increased Maintenance or Repair Costs- Furnished rentals are subject to more wear and tear, leading to higher maintenance and replacement costs over time.
What to Include in a Furnished Rental
When preparing a furnished rental property, you’ll want to provide the essentials to ensure a comfortable living environment for your tenants. Here’s a list of items commonly included in a furnished rental. Remember, each furnished rental is different, so you may opt to include some or all of the following items.
- Beds and mattresses
- Couch or recliners
- Dining table and chairs
- Coffee table and/or side tables
Bedding and Linens
- Sheets, pillowcases, and blankets
- Kitchen towels
Kitchen Appliances and Utensils
- Coffee maker
- Pots and pans
- Streaming devices
Utilities and Amenities
- Heating and air conditioning
- Internet and cable
- Water, gas, electricity
- Washer and dryer
- Smoke detectors and carbon monoxide detectors
- Fire extinguisher
How to Protect Your Furnished Rental Property
Whether you provide furnished or unfurnished rentals, you’ll want to protect your property from damage beyond normal wear and tear. Protecting your furnished rental property involves a combination of careful tenant selection, financial safeguards, and legal measures. Here are some tips to help minimize the financial risks of providing fully furnished rentals.
- Thorough Tenant Screening- Whether you have a furnished or unfurnished rental, thorough tenant screening is crucial to protect your property. You’ll want to look at each applicant’s credit history, rental history, employment verification, and criminal background checks.
- Larger Security Deposit- Consider requiring a higher security deposit for furnished rentals. This can help cover any potential damages or losses to the furniture and other items in the property.
- Move-In and Move-Out Inspections- Conduct thorough inspections before a tenant moves in and after they move out. Document the condition of the furnishings and the property in detail, including photographs. This provides clear evidence of any damages that occurred during the tenancy.
- Look at Insurance Options- You may want to consider requiring renter’s insurance for your properties. However, you may also want to check with your insurance provider to see if you need additional coverage to protect the furnishings in your rental property.
- Lease Addendums or Clauses- Include specific clauses in the lease agreement that address the unique aspects of a furnished rental. This can include details about the condition of furnishings, tenant responsibilities for maintenance, and any restrictions on moving or modifying the furniture.
Protect Your Rentals With Professional Management
Offering furnished rentals can be an excellent strategy to attract a wider tenant pool and potentially charge higher monthly rates. However, it’s important to recognize the higher investment costs and risk of damages. That said, whether you offer furnished or unfurnished rentals, it’s important to protect them with professional property management.
Professional Property Management of Northern Virginia can help you manage your rental properties with ease. Whether you need help finding high-quality tenants, collecting rent payments, or performing maintenance, we’ve got it covered. Contact PPM today to learn more about our services and how we can help your rental business succeed.