Fully furnished vacation and short-term rentals are all the rage, but what about long-term rentals? Should owners furnish those too to attract quality tenants? Deciding between unfurnished vs. furnished means weighing all of the pros and cons based on the demands of the local market. So, join us below as we examine what tenants expect in a furnished apartment and help you decide if it is the right choice for your investment property.
What is an Unfurnished vs. Furnished Apartment?
When advertising your rental as unfurnished vs. furnished, expectations play an important role. That said, tenants searching for the convenience of a furnished apartment may have different ideas of what should or should not be included. So, check out this industry standard of the types of furnished apartments below –
Unfurnished Rental Properties
Unfurnished rentals mean just that – no furnishings. That said, it will include all essential items such as appliances and fixtures, but the tenant must bring in their own furniture. This is the most common type of long-term rental and allows tenants to turn their rental into a welcoming home with their personal style.
Depending on who you talk to, semi-furnished can mean anything from the bare essentials to almost fully furnished. That said, semi-furnished typically includes a few larger furniture pieces that a tenant would need to move into the space comfortably. So, while it can vary from unit to unit, check out the list of basics below –
- Living Room Sofa
- Dining Table and Chairs
- Bedframe with or without a mattress
Fully Furnished Rental Units
Fully furnished is another way to indicate move-in ready. Therefore, this includes everything a tenant needs to live comfortably in each respective room. Thus, allowing the tenant to arrive with their personal belongings and little else. Check out the list of minimal furniture to include in a furnished apartment below –
- Dining Room Table and Chairs
- Living Room Sofa
- Coffee Table
- Storage Shelving
- Bedframe and Mattress
- End Tables
- Window Treatments
- Dresser Storage
- Utensils, Dishes, Glassware, Pots, and Pans
Furnishing Expectations in Short-Term vs. Long-Term Rentals
Short-term and vacation rentals have become a booming industry. In this type of rental, tenants stay anywhere from a couple of weeks to several months. However, owners must understand that tenants looking for this type of unit expect it to come with some, if not all, furnishings. Ideally, a tenant can walk in, drop their bag, and live comfortably.
That said, long-term rentals are typically somewhere that tenants like to bring in their personal style. Thus, fully furnished long-term rentals are not as common or desirable in today’s market. However, locally if your rental pool is heavily populated with students, military, or industrial contractors, a fully furnished rental may prove desirable.
Pros and Cons of Unfurnished vs. Furnished Rental Properties
Furnishing a rental unit is not cheap and therefore must be a calculated decision. Therefore, understanding your target renter and weighing the pros and cons is critical. Continue reading below for some of the common advantages and disadvantages that may help with your decision.
Top Pros of a Furnished Rental Property
- Increased Rental Rates – Providing a move-in-ready unit means owners can charge tenants a higher rate for furnished apartments. Additionally, since furnished units are most often associated with short-term rentals, these shorter leases also command premium rates. So, this can help owners to offset the cost of furnishings.
- Higher Security Deposits – When the rental unit includes furnishings, it costs money to repair or replace these if they break or become shabby. Generally, the increased risk of damage allows owners to charge a higher security deposit to cover potential tenant damage above normal wear and tear.
- Predictable Tenant Pool – Renters seeking a fully furnished rental are likely to be young professionals, families, or students who do not have an established personal furniture collection.
Advantages of Renting a Property Unfurnished
- Save money by not providing essential furniture.
- Less need for added lease addendums to protect your investment in furniture pieces
- Tenants that can make the space their own may stay longer
- Less worry about potential damage to items
- Lower turnover costs
Disadvantages of Renting Your Property Furnished
- Higher Turnover Rates – Typically, fully furnished units pull in the short-term rental crowd. Thus, owners can expect higher turnover rates.
- Greater Potential for Damage – It is not uncommon for the rate of wear and tear on your property to be higher in furnished units. Therefore, creating added replacement expenses and cleaning fees during turnover.
- Possible Storage Fees – Since not every renter needs a fully furnished unit, owners must arrange to remove and store unwanted furniture. This leads to added hassle and costs for the owner.
Drawbacks to Renting an Unfurnished Property
- By not providing furniture, owners may not attract the short-term rental market.
- Unable to increase the rental rate based on the added convenience of a turnkey unit
- Potential for added damage from tenants moving their own furniture in and out
Tips for Protecting Your Furnished Rental Property
For landlords, unfurnished vs. furnished does not change the fact that your property needs protection. Comprehensive inspections, solid legal rental agreements, and security deposits are all tools to protect both landlords and tenants during a renting transaction. Thankfully, landlords can use these tools to minimize the financial risks of renting fully furnished units. Read on to find out more below –
- Critical Inspections – Performing move-in and move-out inspections are vital to determine normal wear and tear versus tenant damage. From this information, owners can determine how much, if any, to hold from the security deposit.
- Adding Lease Addendums – Providing tenants with a fully or semi-furnished home requires a detailed list of included items. Additionally, it is a good idea to document the condition with photos or a video walkthrough carefully.
- Comprehensive Tenant Screening – Thorough applicant screening of all tenants is vital to protecting your investment property. Begin by creating a standard set of qualifications that complies with all Fair Housing Laws. In general, owners screen applicants for income, creditworthiness, criminal background, and rental history. Also, be sure to require previous landlord references, which can help you discover any red flags.
- Increased Security Deposit – Typically, a security deposit is equal to one month’s rent. However, furnished units have a higher risk of damage. Most states cap security deposits at two months’ rent. So, for furnished units, consider charging more than the standard one-month rent to cover any added expenses you may incur.
- Additional Insurance – Throughout the industry, renter’s insurance is commonly required as a term of the lease agreement. That said, since the furnishings belong to the owner, check with your landlord or homeowner’s policy to ensure you have adequate coverage.
Protecting Your Property with Expert Rental Management
The quandary of unfurnished vs. furnished relies on owners weighing their financial goals and evaluating the local market’s needs. Regardless of whether you provide furnishings, protecting your investment property is a critical part of your success as a landlord. In conjunction with comprehensive inspections, thorough screening, and lease addendums, professional property management services help owners get the most out of their investment.
The dedicated team of Northern Virginia property managers at Professional Property Management helps investors protect their valuable rental interests. Utilizing a legal lease agreement, standardized tenant screening, and thorough inspections, owners gain peace of mind knowing that PPM will help maximize their rental investment. Call today to speak with one of our industry experts to find out more.