As a professional rental management company, one of the more common questions we get asked from investment property owners is whether to rent their apartment, condo or townhouse as a furnished or unfurnished option. Based on our years of experience, there are many pro's and con's a real estate investor should consider before committing to any one option.
Obviously, with a furnished rental, you are able to secure a much higher rent level compared an unfurnished rental. Depending on the amenities provided, one can generally fetch anywhere from a 20-50% premium over and above "normal" rents - sometimes even higher. However, the expectation from most tenants seeking furnished accommodations is for a fully turnkey stay.
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Since most furnished tenancies are shorter term 1-3 months, sometimes longer, tenants do not wish to setup utility accounts, including TV, internet, phone, etc. Of course, cutlery, glassware, linens, bedding, and other household items need to be purchased. With these "extra" costs it often cuts into the "extra" income you are earning. In considering that there is usually periods of vacancy during turnover of tenants, and that as an owner, you still need to cover the "extra" expenses of utilities etc which nullify any additional rental income collected.
Likewise, with the more frequent turnover of tenants, your property is subject to greater wear and tear over the long term. If you use the analogy of a car rental, surely, a rental car will ensure much more wear and tear vs. a car with one owner. The car with a single owner will generally have less wear and tear as the owner is more invested and will take much better care of the auto. The same philosophy applies to property.
In addition, an unfurnished rental often has a lease term of 1 year or longer which provides more consistent rental income, less turnover and less wear and tear.
In considering the above, we will almost always recommend unfurnished rentals over furnished rentals. With an unfurnished rental, you can secure a more long term stable tenant, who supplies their own furniture, sets up their own utility accounts and takes care of your property as though it's their own.
Should I Rent My Investment Property As Furnished or Unfurnished?
Carey Chan is the Managing Broker for Urban City Rentals Inc who provides professional rental property leasing and management services for unfurnished strata titled apartments, condominiums, lofts and townhouses in the metro downtown Vancouver area and Richmond, BC. Visit http://www.urbancityrentals.com to learn more about how Urban City Rentals can help you manage your investment property today!