The cost/benefit of furnished or unfurnished
Looking at short term rentals.
This would probably not be an option that most landlords would look at for a house unless they wanted to attract international tenants when located near a university or unless they intended to rent the property as a ‘holiday let’ in a holiday destination.
But let’s say that is exactly what you do want to do – rent the property in a holiday destination with the objective of getting well above average rentals with short term lets.
The positives:
- you can ask a higher rent than if the place had no furniture – if the house is nice and the furniture is top styling (not necessarily expensive) then premium dollars can be asked for the rental
- you can depreciate the furniture
- if the property is in a holiday destination you can use throughout the year for your own holidays
The negatives:
- if a property is let furnished and anything breaks down it must be replaced as it is part of the letting agreement
- insurance needs to be taken out to cover any tenancy damage or theft
- to continue receiving high rental, the chattels would need to be replaced about every 5 – 6 years (this is not necessarily a negative if high rents have been achieved, but it is something to be considered)
If this style of property investing is being considered then so to should be the fact of marketing the property aggressively. One would have to consider whether a property management team can do that effectively or whether it should be done personally and totally self managed. This can be a very good option and once set up correctly can work very effectively and profitably.
Filed Under: Property Investment Tips
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