A primary question for landlords/investors should be which is the better option furnished or unfurnished?
There are many pros and cons to both unfurnished and furnished properties. There is no right or wrong answer as the best rent return will depend on your location and the demand for the targeted residents in your property’s location.
Knowing what works best for your location is important, so do the research first!
The primary benefit of furnishing your rental property is that it can provide extra returns over the standard rent on a property, as people are more willing to pay higher rent for convenience. Renting though a real estate, share house or Air BnB are all great options to maximise the return on your property.
There are many ways to furnish your property one way can be to hire interior designers who Hi Pages states it can cost between $50–$90 per hour for an inexperienced interior designer who can furnish a property for a typical 3-bedroom can cost up to $20,000. Another way can be to do it yourself as room can be between $400 – $5,000 to furnish, using second-hand furniture is a great option if you are on a budget. For example, on Gumtree you can find everything you need for a two-bedroom home:
Lounge $400, TV $300, TV Stand $100, Side tables $40, Chairs $100, Bookshelves $200, Bed frame $150 x2, Mattress $300 x2, Nightstands $40 x2, Desk plus desk chair $205 = $2,325.
Changing your weekly return from $100 up to $250 per room.
Airbnb is another great way to rent out your furnished property for a few nights a year charging larger amounts over busier times during the year. Most host with Airbnb pays a 3% fee and calculated by nightly rate + cleaning fee + additional guest fee if applicable taxes automatically deducted from the hosts payout.
Unfurnished properties do tend to have long-term leases although such tenants don’t tend to pay the higher rents, having someone in for a long time gives landlords/investors insurance of a well-structured rental return.
Renting your properties though a Real estate at say $500 a week unfurnished with an 8.8% management fee will cost you around $3,000* (depending on what agency you go with) a year leaving the property as a set and forget investment. Unfurnished is an option if you don’t want the added expense of buying furniture and whitegoods or worry about replacement of products.
Talk to property managers in your area about your individual property and whether they believe it will do better as furnished or unfurnished. They know the market and the type of tenant your property will attract best.