Unsure whether to furnish your buy-to-let property or let your new tenants add their own touch? The choice is yours…
When renting out your property, you can offer nothing but an empty shell; part-furnish; or add everything from soft furnishings and bedroom furniture to the latest kitchen appliances. It’s a hard decision, and one you’re only likely to feel comfortable with once you’ve researched the local area and considered your potential market.
Who will your property attract?
In the south east, our clients see everything from university students looking for places to live close to Camberwell College of Arts and King’s College London to families and everything in between: young professionals, employed sharers, life-style renters, short-term professional tenants and employed couples.
But your type of property will make the difference to who you attract. For example, are you letting out a three-plus-bedroom property, with ample space in a highly sought-after area, such as a neighbourhood renowned for its good schools? Then the likelihood of attracting a family is higher compared to a one-bedroom apartment with a balcony, on-site gym and secure underground parking. What appeals to one person might not be right for the next – and the same is true for furnished and unfurnished rentals.
Furnished
Although one landlord might include more than the next, when it comes to furnishing a rental, a good rule of thumb is to supply everything a person needs to live comfortably. This includes sofas, dining table and chairs, tableware, storage, blinds and/or curtains and beds. The amount of furniture you provide should hit the balance between a space that’s practical and comfortable, while avoiding over-cluttering.
The main thing to be aware of when you let out your property furnished, is the legal obligations regarding the furniture, furnishings and appliances. It’s important that the furniture you provide is in a good condition, not soiled or damaged by previous tenants and that your appliances are in working order (and PAT tested for safety). Furnishings should also meet the legal standards on fire resistance and have labels to demonstrate that they meet this.
Benefits
- The furnishings can be reused once the tenancy ends, (or re-sold if in good condition) if the wear and tear isn’t too great, saving you money.
- A property with furniture can demand higher rent – this is particularly beneficial if you need the rental money to cover the cost of your mortgage.
- Don’t be perturbed by the potential expenses of replacements, as a percentage of the cost of replacing or disposing of old items is tax-deductible. Pre-April 2016, landlords could only claim a wear and tear allowance of 10% per net rent. But now, you can deduct the costs you incur on replacing furnishings, providing the item is solely for use by the tenants.
- Your property might let faster than an unfurnished one, depending on the type, location and demand.
Drawbacks
- More potential for damage if your tenants don’t take care of your furnishings, resulting in a possible greater financial burden.
- Furnished properties tend to attract shorter-term lease agreements with tenants who are likely to be transitory, such as students and young professionals. And although this can mean a higher turnover, this may not necessarily be a drawback depending on the demand for rental properties in the area.
- The cost of furniture can be expensive – and if you decide to buy low-cost items, there’s a high chance they’ll need replacing after every tenancy.
- You (or your agent) will need to factor in more time for managing furnishing-related callouts.
- The decision to furnish could increase your insurance bill and affect any council tax exemptions that might apply while the property is unlet.
Urban Village top tip: If you’re letting out your property furnished, think longevity and high-quality, and complete all due diligence necessary in order to attract the right tenant.
Offering a fully furnished, turnkey apartment or townhouse, with stylish built-in storage and an ultra-modern kitchen – including items such as an American-style fridge freezer, wine cooler and stylish dinner ware – is an excellent way to attract high-value, short-term professionals. Especially those looking for a contemporary place close to fast-transport links into the city.
Unfurnished
While this could be translated to mean bare walls and empty floors, if you decide to let your property in an unfurnished state it’s best practice to include kitchen and bathroom fixtures, white goods, plus habitable flooring and curtains and/or blinds. A far cry from fully furnished, but not completely empty.
Benefits
- You’ll save money on buying things such as soft-furnishings which are liable to considerable amounts of wear-and-tear, meaning your initial spend will be considerably less.
- Tenants who add their own touch to a property are likely to stay for longer, as they’re looking to make a house a home and have often accumulated their own furniture over time. For these tenants, the process of moving frequently comes with its own burdens and is more costly.
- You’re not responsible for insuring tenants’ furniture or other items in the property. In fact, the responsibility for breakages lies with the tenant, saving you concerns over wear and tear.
- It’ll be easier to clear and deep-clean the property once empty, saving on costs once your tenants have vacated.
- Shorter inventories – of course, unfurnished properties still require one, but they are much simpler than furnished homes.
Drawbacks
- You’re less likely to achieve the levels of rent that a furnished property has the potential to bring in, simply because you’re leasing an emptier space.
- By not offering furniture, your property might be less attractive to potential occupants, such as students, highly mobile professional clients or young families who may have not had the opportunity to buy furniture and are looking for an immediate move-in.
Urban Village top tip: to attract those ready to commit to a long-term tenancy and value the opportunity to personalise and bring their own furniture, the process from start to finish must be hassle-free. And if re-painting, go for neutral colours or contemporary laminate flooring, which are less likely to clash with your new tenants' furniture and interior tastes.
Whether you decide to leave a blank canvas for your tenants to introduce their own belongings, or you’ve chosen to include everything, right down to matching bathrobes, the type of property you choose for occupants ultimately lies on your personal preference and circumstance. A good middle-ground is to go for the part-furnished option – where you offer key, larger items such as beds and wardrobes while leaving the smaller bits and bobs to the tenant.
With our knowledge of the local rental market and its demand, we’re perfectly placed to give you the most accurate free rental valuation for your property alongside expert inside advice on the unfurnished vs. furnished discussion. What’s more, we don’t inflate prices on repairs and maintenance and our fees are outlined clearly from the get-go.
Need more advice about leasing out your property? We can help. Give us a call on 020 3519 9121, fill out a form via our contact us page or drop into our Denmark Hill office – tell us about your rental and we can decide on the best option for you.