As a landlord, you have some options to consider when you’re renting out an apartment. How much is the rent? Will it be all inclusive? And then of course – furnished or unfurnished?
Here at Flex, we offer both furnished and unfurnished apartments. We want to give tenants and landlords access to the options that works best for them. For landlords, that means tailoring a unit to what will bring them the most return on investment.
Furnished and unfurnished apartments each offer different benefits. While unfurnished apartments are pretty standard, a well-furnished property can rent for 25% to 75% more than an unfurnished apartment. This can make furnished apartments a profitable choice for property owners who are looking to rent out units.
Typically all furnished apartments have at least a bed, sofa and a kitchen/dining table with chairs. And of course, the usual appliances that are included in unfurnished apartments (fridge, stove, and sometimes things like a dishwasher or in-suite laundry).
Othertimes, these apartments are furnished more elaborately with everything tenants need to feel at home. This includes small appliances (think coffeemaker, toaster), bedroom furniture (bed, dresser, nightstand), bathroom items (shower curtain and mat), living room furniture (sofa, coffee table, end table, television), a dining table and chairs, and even dishware and flatware. Some landlords will go the extra mile, including things like lamps, artwork and alarm clocks. Well-furnished apartments like this can rent at a higher price point than those with minimal furnishings.
So let’s look at the pros and cons of furnished apartments:
Higher Price Point
As we mentioned, furnished apartments rent at a higher price point than unfurnished apartments. That 25-75% jump is justified by the extra value you’re providing.
Reduce Moving Damages
With simple move-ins, you can avoid damages to the unit caused by moving furniture.
For tenants, the appeal of the low upfront cost is tempting. They’re saving on furnishings as well as move-in costs since the moving process for a furnished apartment is a lot simpler.
The furnished rental model is a creative way to rent out smaller units. You can control how the unit is styled and make it functional to live in. When tenants are able see the unit furnished, it’s easier for them to picture how they could live comfortably in the space.
If you’ve got an eye for design, you can take an apartment from meh to yes please. Some furnished apartments can be very impressive, with stylish decor and trendy furniture. This attracts tenants who will want to take care of the place.
Downsides of Furnished Rentals
Of course, the start up costs for a furnished rental are much higher. The average cost for furnishing a 1 bedroom apartment is around $3500, but if you are strategic with your purchases, you can spend less. Be prepared to invest more in your unit up front. But remember, you’ll make that back pretty quickly.
This isn’t necessarily a bad thing, but it can turn off some landlords. Furnished rentals are usually better suited to shorter leases (for example a 6 month lease). They’re often attractive to renters who are going through a transition and need somewhere temporary to live. Be prepared to spend a little extra time finding tenants.
Tenants and Furniture
Even if you love all the furniture in your unit, your tenant might not. They may want to replace an item like a side table. They also may have some of their own furniture.
Wear and Tear
It’s expected to see some wear and tear overtime with furniture. You will occasionally have to replace furniture between tenants. The idea is to strike a balance of durability and affordability when you’re buying furniture so that you can get the most bang for your buck.
To run a successful furnished rental, you should be prepared to put in some extra time and energy. If you’re wondering whether a furnished rental is right for you, or if you want some help with your unfurnished apartment, let’s chat.