Should landlords furnish their rental properties?
The owners of new or nearly-new units often face the conundrum of whether to furnish their properties, but experts say it’s probably not worth the effort or the expense.
There are record numbers of new apartments in southeast Queensland, which also have the relatively unusual habit of being offered as fully furnished to potential tenants.
Landlords can charge about $50 to $100 more in rent per week for a furnished apartment, depending on location and quality of furnishings, which does seem like a good return on investment.
But local property management experts believe that the extra weekly coin does not make up for the reduced tenant demand, the potential for higher turnover as well as more wear and tear. Hot Property Management’s Maddyson Solano is not a fan of furnished units and says the cons outweigh the pros.
“Furnished properties can often be more of a headache on many different levels,” she says.
“Your rental market is reduced due to most people having their own furniture, which can mean longer vacancy. The type of tenant you attract often leads to higher turnover as they’re often looking for shorter-term leases. [They] can often cause higher wear and tear to your property, which means more maintenance costs.”
Bees Nees City Realty new business manager Nathaniel Smith says demand for furnished properties is location dependent, with anything outside of walking distance of the Brisbane CBD probably not ideal.
“The furnished market is very location-sensitive. Furnished properties located in the middle of the CBD, with fashionable and quality furnishings, are far more popular than those in the suburbs and can go quite quickly,” he says.
“Many professionals flying between cities for work, rent units on the long-term scale due to it being more feasible than staying three nights a week in a hotel. These tenants are ideal and we are seeing more and more choosing the long-term rentals.”
But Smith says the cookie-cutter nature of furniture packages can reduce a furnished apartment’s uniqueness and therefore its marketability to potential tenants.
Property owners are also responsible for maintaining the furnishings – including any supplied white goods – in good condition, which are additional expenses that landlords often do not include in their budgets.
Solano says the shorter lease periods can also result in higher marketing and re-letting fees. “In our experience, most properties are actually harder to lease with furniture, which can mean prolonged vacancy and dropping the rent to meet the market,” she says.
“We strongly recommend our clients reconsider it. It’s an overrated concept that can potentially cost you big time.”
Source: www.domain.com.au
