If you are an apartment investor, choosing the route of furnished or unfurnished apartments is a very important decision. You have to choose what will maximize your income and protect the entire investment in your building. It’s not an easy choice and I made the stand, so I’ll give you my overview of the pros and cons of furnished and unfurnished rentals.
Of course, the easy and simple thing to do when investing in an apartment building is to rent out the unfurnished units. For the most part, this is a good, steady income without worrying about the furniture or wear and tear of the items you bought. Some tenants like to move into the rental for years to come and all you have to do is provide occasional maintenance, fix minor plumbing issues, broken windows and the like. Some tenants prefer shorter rental terms, which means you have to refresh the apartment with paint and other maintenance work to keep the units fresh for the next tenant.
Overall, there is much less to think about when renting unfurnished apartments compared to furnished apartments; the duration of the lease and maintenance being the main considerations. The location of the property, the style and maintenance of your building will determine the type of tenants you attract, so this is an important factor in determining whether you should rent furnished apartments or not.
With a short-term tenant, a monthly lease in a furnished apartment is often very attractive. For example, members of the military are generally posted for short periods of time and do not like having to transport furniture from one duty station to another. Also consider traveling businessmen and traveling nurses who work on short-term assignments. They are perfect tenants for furnished apartments and these excellent tenants cause minimal damage because their companies often rent the apartments for them, so they have more inventiveness to be gracious tenants.
Some municipalities allow you to divide apartments into separate rooms to create shared units. Apartments with shared common areas have enormous profit potential. A furnished bedroom is very convenient for tenants who want to travel light or who want to maximize their income by sharing expenses with others. Since many people travel on missions and have other homes, their main concern is work and having a safe place to sleep at night. We don’t want to assume that all short-term tenants looking for a furnished apartment are the vagabond type.
Tenants who rent a furnished apartment are usually willing to pay a little more for an apartment, primarily because they get more. Second, most will already have a full set of furniture elsewhere and simply don’t want to have to move or store their items. Since they use your furniture, they accept the responsibility of taking care of it and paying a security deposit to cover the damage. Overall, you as a landlord have a higher class of renters.
The decision to rent furnished or unfurnished apartments has a huge impact on the type of tenants you can attract. If you’d rather attract more expensive tenants looking for shorter-term leases than furnished rentals, this is the way to go. If you prefer long-term renters who like to nest for a year or more, an empty, clean, well-maintained apartment is the right choice. Ultimately, the decision should be based on what is the most profitable situation for you, the investor.