Your furnished investment property is not a dumping ground for your old furniture from home!
At some stage during your investment lifetime you may face the dilemma of whether to rent your investment property furnished or unfurnished.
There are pros and cons to both these paths so let’s take a closer look at them.
Location is the first aspect to consider. Your property really needs to be in an area that has a high degree of business travellers. Furnished homes normally attract itinerant people. These are people that are either relocating for a short period of time, 3-6 months, for work positions or a even place to base themselves until their own home they have purchased is ready to move in to. You would normally expect a slightly shorter term lease on furnished properties.
When furnishing your property, there are some things to consider. The furniture needs to be of quality enough that it doesn’t break easy under, above normal, use conditions. It needs to be fashionable with clean lines and relevant to today.
It also has to be cheap enough that you can depreciate it in five years or less and replace it. A key component with furnished properties is, keep the decor current. You also need to be aware that when any furnished item breaks, legislation requires it to be repaired or replaced by the Landlord.
Updated furnished properties will attracted a premium from the market compared to unfurnished properties or furnished properties with outdated furnishings. In most cases the demographic you’re targeting understand the concept and expect to pay extra for the convenience. If you’re property doesn’t attract a premium then maybe consideration should be given as whether this type of concept is suited in your area. Ensure the premium covers the costs of your furniture depreciated over five years, repairs and maintenance for breakages, and extra cleaning for all the furniture (for example, material lounges) in your property.
Renting a fully furnished property can be very rewarding if you ensure you have ticked all the right boxes. Contact Shannon on 0413 050 606 if you would like to know more about if you should lean towards furnished or unfurnished with your next investment property.