Making the Furnished vs. Unfurnished Decision: A Guide for Property Owners
In the dynamic world of property management, the decision to rent out a property furnished or unfurnished stands as a crucial choice for landlords. This decision not only shapes the attractiveness of the rental to potential tenants but can also influence the overall rental yield and management considerations. Hence, when addressing this question for our owners, we must first highlight that there is no ‘one-size-fits-all’ approach and emphasize the importance of considering not only the type of property being leased but also the influence that Perth’s unique demographics may have.
Before delving into the specifics of this decision-making process, it’s crucial to clarify exactly what is meant by “furnished” and “unfurnished” in the real estate sphere. Essentially, a ‘furnished’ property is a space that tenants can move into immediately, as it is equipped with all the essential furnishings, such as sofas, beds, tables, and televisions. Whereas an ‘unfurnished’ property is one in which a tenant is expected to supply all of the above and is only equipped with hard-to-move items like a dishwasher and dryer.
I. Renting Apartments: The Furnished Advantage
When it comes to renting out apartments, the furnished option often holds a distinct advantage. This preference stems from various factors, including convenience, flexibility, and cost-effectiveness for tenants. The convenience of moving into a fully equipped space without the hassle of purchasing and transporting furniture is a significant draw. Furnished apartments appeal to individuals seeking shorter-term accommodation, such as migrants, students, and professionals, all of whom represent significant portions of Perth’s growing population. As recently reported by REIWA, WA’s population remains the fastest-growing in the country, with more than 90,000 people moving here in 2023 alone. This is important to consider, as recent arrivals will be searching for a fully equipped apartment to get settled into while they find their feet in a new city. In urban areas like Perth, where demand for temporary housing is high, offering furnished apartments can attract a steady stream of tenants, maximising rental income for property owners.
II. Renting Houses: The Case for Unfurnished
In contrast to apartments, when it comes to renting out houses, opting for an unfurnished approach often proves to be more advantageous. Consider the typical demographic that can afford the higher rent associated with renting a house – they are often individuals or families who already possess their own furniture or have the means to acquire it. For these tenants, the appeal lies in the opportunity to bring their furniture with them and not have to worry about the hassle and financial burden of storing furniture. By offering unfurnished rentals, landlords cater to this demographic, allowing tenants the flexibility to furnish the space according to their needs without being constrained by existing furnishings and having to figure out storage solutions for their own furniture. Moreover, opting for an unfurnished approach can lead to lower insurance premiums for landlords. Without the need to insure valuable furnishings within the property, insurance costs are often reduced, resulting in potential savings over time. Additionally, unfurnished properties typically experience lower wear-and-tear, as tenants are responsible for furnishing and maintaining their own furniture. This can result in fewer maintenance requests and lower overall upkeep costs for landlords, contributing to a more streamlined and cost-effective property management process.
Regards,
The Celsius Property Management Team