Rental units are always in high demand, as there’s such a large shortfall in residential properties in the UK each year. In 2019, the UK needed to build 300,000 new homes to satisfy the market, but only 170,000 were constructed.
A shortfall of 130,000 is pretty staggering, isn’t it?
The low supply is creating a boom in the rental market, though. Not only that, more and more people are turning to the rental lifestyle because it fits around them. There’s no worry about scrimping and saving for a deposit, and there’s no worry about finding furniture either.
Or is there?
Landlords have been debating the value of renting property furnished or unfurnished for years now. Many can see the benefits, while others can’t get past the initial costs.
There are many great reasons as to why you should consider renting your property fully furnished, though. Our own research tells us that landlords consider a furnished property as one of the biggest tenant expectations of 2021.
In this blog, we explain why renting your property out furnished works in your favour. But first, let’s talk about what it means to have a property unfurnished, furnished or part-furnished.
What Does Unfurnished Mean?
An unfurnished property is a complete blank slate. Residents have to buy all their own furniture. Depending on your idea of what an unfurnished property is, you might also choose to leave out:
A furnished house is the polar opposite. All the bells and whistles are included. As part of the full package, this can even extend to providing tenants with:
What you consider a furnished house to be will either be at your discretion, or a point of discussion between you and any interested party. In any case, you should at least cover the floorboards with carpet and have a cool fridge ready for your tenants to fill with a few beers. Well, moving is thirsty work after all.
Somewhere in between the two choices sits a third option; part-furnished. A part-furnished property comes with all the basics. This means installing a:
Some white goods (eg. kettle, microwave, fridge etc.)
The option you go with will depend on your budget, what your tenants expect and where you’re based, but furnished properties tend to let out quicker and for more money. If increasing rental yields and avoiding void periods is your main driver, the answer to ‘should you be renting property furnished or unfurnished’ should be pretty clear.
Make Your Property Stand Out
Potential tenants could be viewing several different properties in your area, which makes it harder for any home to be more memorable over another. Keeping your property in front of potential tenants’ minds is easier when there’s something about your property that’s unique.
In one of our other blogs, we advised landlords to be brave with accessories. Bold statement pieces such as artwork captures people’s attention, and when it comes to making a decision over where to rent, it’s your property that will first come to mind.
However, it’s not just the quirky stuff you’ll be remembered for. The attention to detail you’ve put into making a house feel like a home for tenants will come into play as well.
Add style and comfort to your property with mirrors, cushions and even your choice of lighting. It will add a pop to your rental unit. When deciding on whether renting property furnished or unfurnished is right for you, think about what a potential tenant would actually prefer. Getting to know your target market will help you make the right choice, as we discuss a little later on.
How Much Extra Rent Can You Get For a Fully Furnished Property?
The hassle that goes into decorating and furnishing a property can be too much for some potential tenants. 62% of Brits even went as far as saying moving was the most stressful life event we go through, with reasons such as moving heavy items and forgetting how to put furniture together coming high on the list.
While there are a few initial costs that come with buying furniture for rental properties, landlords can quickly get that money back by increasing rental figures.
Surveys we asked UK landlords to complete told us two things:
62% of landlords didn’t make any more money from their rental properties in 2020 than usual
28% actually lowered their rental figures
Having a fully furnished property means there’s more scope to make a bigger profit. If you improve the quality of the property and give potential tenants the convenience of having a place ready to live in immediately, it should be reflected in the rent.
Property Wire reported that data from OnTheMarket found a furnished flat in Manchester could yield on average an extra £101 a month for landlords, which is an increase of around 15% for a two-bed property.
If you’re unsure whether or not to be renting property furnished or unfurnished, think about how long you plan on holding onto your investment. Over time, the profits of providing furniture will greatly outstrip the initial cost, so it’s worth bearing in mind.
Appeal to a Wider Market
As mentioned above, many people in Britain find moving stressful, and there are several different types of tenants who will be attracted to a furnished property. Hassle-free renting appeals to:
Mobile professionals looking for trendy, affordable and commutable locations
Short term let tenants
Tenants from overseas
It’s worth remembering that properties based in high-demand locations have the potential to rent faster when furnished, especially when there are plenty of amenities nearby, as it means the property has everything needed to be lived in straight away.
What You Need to Keep in Mind When Letting a Furnished Property
Letting a property out that’s part or fully furnished has many benefits to it, but consumers won’t settle for a rental that’s not been completed to a decent standard. It’s important you keep the following points in mind when preparing your property:
Safety Must Come First
As a landlord, you have a duty of care towards tenants, so their safety is your number one concern. Faulty furniture that’s not fit for purpose can put a tenant’s life in serious danger, which is why you have to buy pieces from a reputable furniture supplier.
Our range of furniture has passed the UK’s Fire Regulations, so you can be confident in our ability to provide your tenants with safe and practical products for their enjoyment.
For more information on furniture fire safety, click here.
Cheap Doesn’t Necessarily Mean Cost-Effective
Unfortunately, some landlords think they can charge a premium rate for their property because they’ve included the bare essentials. However, these landlords struggle to make an impact when potential tenants come round for a viewing.
Furniture that looks and feels cheap is easy to spot. You need to find a furniture provider who believes luxury can be affordable.
The right furnishings show you actually care about the tenant’s quality of life, which increases the potential of them becoming long-term tenants. Given that 40% of landlords have experienced void periods lasting at least one month, keeping tenants in place and happy can save you a lot of money.
Furnishings Still Belongs to You
Your tenants have use of the furniture you’ve provided, but ultimately, all the pieces still belong to you.
With that in mind, make sure you come up with a furnished rental checklist, detailing all your items and their condition, and go through it with tenants. If any of your furniture is damaged, you may be able to keep a percentage of their deposit to cover the cost of replacing items.
Furniture can also be tax-deductible if you need to replace anything, so it’s worth hanging on to your receipts and checking with HMRC if any sum can be reclaimed.
Make sure to also have landlord contents insurance in place, as this will cover you in the event sofas, beds and other free standing furniture is damaged beyond repair.
Should You Be Renting Your Property Out Furnished or Unfurnished?
Renting your property furnished or furnished can be the difference between landing a tenant or losing one. Potential renters have to feel at home in your property, or they’ll simply look elsewhere. If cost is holding you back, remember that anything you spend is just more investment in your property. The more you put in, the more you get out.
We’re specialists in providing landlords with affordable, quality furniture. Our goal is to ensure your tenants have everything they need to live comfortably, while reducing the amount of stress and cost involved for you.
For more information on our furniture range, check out our collection, and feel free to get in touch if you need any more advice on whether you should be renting property furnished or unfurnished.