Make sure you have all the facts to hand before deciding whether to invest in furniture.
If you have a buy-to-let property you want it to achieve the best rental yield it possibly can. The property itself will be one factor to influence this, but also how you present the property with be another.
One question many landlords ask is, “Should I let my property with furniture provided?” To answer this question consider the following five points.
1. Furniture could achieve a higher rent.
This will entirely depend on the market demand and the market you are aiming at. If there is a lack of furnished properties then it is likely you will be able to achieve a higher rent. Speak to real estate agents to gauge their opinion and remember to include any expenditure of furniture for your costs which could cut into your profits.
2. Void periods could be affected.
Likewise is there more demand for furnished or unfurnished properties? This could influence how quickly the property lets and any loss in rent should be factored in to the overall annual costs of the property.
3. The tenancy length may be influenced.
Generally properties that are not furnished tend to enjoy longer tenancy terms. For a landlord, the longer the tenancy the better so this does seem a tempting, and easy option. The explanation for these longer tenancies is simply that once a tenant has purchased all their furniture and has moved it all in, they are less likely to be in a hurry to move again. Whereas if you move into a furnished property, it is a look more straightforward to pack up and move again out.
4. Providing and maintaining furniture can be costly.
Buying furniture is a costly exercise. It is vital to pick furniture that is hard wearing but also modern and comfortable. Appliances such as washing machines, air conditioning and ovens are pretty standard to include, extra items as lamps, televisions, kettles and toasters are not. Remember that anything you provide you will need to replaced if it is broken so factor this into your projected costs. Remember though that if there is absolutely no market for unfurnished properties then this cost is unavoidable and you should consider it as a necessity as part of your investment.
5. Think about your market.
A condominium in the CBD is likely to attract professional tenants who want the ease of everything from sofas to towels being provided. Whereas houses in the suburbs are likely to be rented by a family who have their own furniture. The property will dictate what market you are aiming for and whether they require furniture or not.
Lastly, in an ideal situation you will try and be as flexible as possible when it comes to furnishings. However it is important to be realistic as you do not want to be constantly moving furniture in and out of a property. But if you receive a good offer and it is subject to providing a bed, if you can lock the tenants in for a longer term as part of the negotiation, then it pays be to flexible.
